Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BIRMINGHAM CORPORATION BILL

As amended, considered; to be read the Third time.

SEAHAM HARBOUR DOCK BILL [Lords]

WALTHAM HOLY CROSS URBAN DISTRICT COUNCIL BILL [Lords]

Read a Second time and committed.

PETITION

Bath Road, Cranford

Mr. A. E. Hunter: With your permission, Mr. Speaker, I beg to present a humble Petition, signed by some 1,700 of my constituents, who are residents of Cranford in the Borough of Heston and Isleworth.
The Petitioners are deeply concerned with the very dangerous motor traffic conditions on the Bath Road, Cranford, and they state that since the application of the 40 m.p.h. speed limit there has been a marked increase in the number of accidents.
The recent accidents at the Berkeley Avenue crossing in its junction with the Bath Road, which caused the sad deaths of two of my constituents, have inspired public-minded citizens to organise this Petition asking for safety measures to be taken at once for the protection of Cranford residents.
Wherefore your Petitioners pray that your honourable House may see fit to urge upon Her Majesty's Ministers that a 30 m.p.h. speed limit be applied to the Bath Road, Cranford, between its junction with the Parkway and the western boundary of the borough, that pedestrian-actuated traffic lights be installed at the junction of the Bath Road and Berkeley Avenue, Cranford, and that a pedestrian subway be constructed on the Bath Road close to its junction with Mornington Crescent (East) without delay.
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Oral Answers to Questions — LAW OF THE SEA (CONFERENCE)

Mr. Hector Hughes: asked the Secretary of State for Foreign Affairs, in view of the results of the recent Conference on the Law of the Sea at Geneva, if he will ensure that any such future conference at which Great Britain is represented shall be limited to problems affecting the fishing waters of the northern European region only, shall consist only of representatives from the nations comprising the northern European region, and shall not be entered upon without the authority of this House being sought and given.

The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): No, Sir. The recent Conference was a United Nations Conference to consider the Law of the Sea as a whole. My right hon. and learned Friend does not deny the usefulness of conferences called for more limited purposes, but he certainly cannot undertake that the Government will never again participate in a conference having the same broad scope.

Mr. Hughes: Does not the right hon. Gentleman agree that for non-maritime and far-distant nations to meet to lay down the law of the sea for European nations in respect of European waters is frustrating and unreasonable, and that this accounts to a large extent for the comparative failure of the recent Conference at Geneva? Will he reconsider my suggestions with regard to having a more productive conference if another conference be held?

Mr. Ormsby-Gore: I will certainly take into account what the hon. and learned Gentleman says. The Conference dealt with many other matters besides fisheries—slavery, piracy, the exploitation of the continental shelf, and so on. There are a great many matters to do with the law of the sea which I think it is advisable to debate in a large conference of this kind from time to time. In many of these other respects it was a highly successful Conference.

Mr. Wall: Will my right hon. Friend say whether the Government are trying


to summon a regional conference to consider not only the question of territorial waters but the question of the conservation of fish?

Mr. Ormsby-Gore: I can say that Her Majesty's Government consider that such a conference might serve a very useful purpose, but its composition and terms of reference would, of course, have to be very carefully considered.

Mr. Edward Evans: Is it not a fact that during the Conference on the fishing rights of maritime nations the intervention of non-maritime countries was distinctly unhelpful?

Mr. Ormsby-Gore: Broadly speaking, I think that that is true.

Oral Answers to Questions — CENTRAL EUROPE (RAPACKI PLAN)

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether he will now state to what extent Her Majesty's Government support the Rapacki Plan for Central Europe.

Mr. Healey: asked the Secretary of State for Foreign Affairs if he will now publish Her Majesty's Government's reply to the proposals of the Polish Government concerning the establishment of a nuclear-free zone in Europe.

The Secretary of State for Foreign Affairs (Mr. Selwyn Lloyd): Her Majesty's Government have carefully examined the Rapacki Plan in consultation with their Allies. They sympathise with the Polish Government's desire to see progress in disarmament and the reduction of international tension. They have, however, concluded that the adoption of the Polish Plan would have such serious military and political disadvantages for the West that it would not achieve these objects. They hope that, either at a Summit Conference or in some other way, it will be possible to agree on different proposals for achieving the same purposes. These views were communicated in a Note to the Polish Government on 17th May. I will circulate the text of the Note in the OFFICIAL REPORT.

Mr. Henderson: Does that reference to our Allies in the Foreign Secretary's reply mean that all the Governments

of N.A.T.O. are rejecting the Plan? Further, are we to take it from his reply that Her Majesty's Government will not agree to include this particular proposal in the agenda of the proposed Summit Conference?

Mr. Lloyd: So far as the views of our N.A.T.O. Allies are concerned, I think that what the right hon. and learned Gentleman has said is correct, that none of them favours the Rapacki Plan in its present form. With regard to the agenda for a Summit Conference, that is, of course, under discussion, and I myself could not conceive of a conference meeting that did not consider the question of European security.

Mr. Healey: Has Her Majesty's Government drafted constructive counterproposals to the Rapacki Plan, and if so, will they not now publish them instead of waiting until the American Government have jumped the gun—as they did on the Rapacki Plan—and put forward less constructive proposals with less chance of success?

Mr. Lloyd: I think the question of what the hon. Member calls counterproposals must be under consideration, but I can offer no promise that we shall publish our proposals for a meeting. What we have to consider is proposals that will add to security.

Mr. Bevan: Is it a desirable state of affairs that proposals of this sort should be rejected before a summit meeting is held? If this sort of thing is done, the road to the summit will be paved by a whole series of prickly rejections and there will be hardly anything to discuss at the summit meeting when it takes place.

Mr. Lloyd: I think there may be something in what the right hon. Gentleman says, but I have been constantly pressed for our views on the Rapacki Plan.

Mr. Bevan: Would it not, therefore, have been perfectly proper for the United States Government, for ourselves and for any other Government involved that is asked the question to say that these are all matters to be considered at the summit and not to reject them out of hand beforehand and make a very unfortunate climate of opinion?

Mr. Lloyd: I do not agree with what the right hon. Gentleman says. If he studies the terms of the Note that we have sent to the Polish Government, I think he will regard it as being of a constructive nature.

Following is the Note:

NOTE TO THE POLISH GOVERNMENT ABOUT THE RAPACKI PLAN

Your Excellency,

I have the honour to refer to the plan for the establishment of an atom-free zone in Europe which Your Excellency outlined in the General Assembly of the United Nations on the 7th of October, 1957, and which was expounded in greater detail in Your Excellency's note and memorandum of the 14th of February, 1958.

2. I have now been instructed by Her Majesty's Principal Secretary of State to inform Your Excellency that Her Majesty's Government have studied this plan with great care. Her Majesty's Government have every sympathy with the Polish Government in their efforts to ensure and to increase the security of their country and they share the desire of the Polish Government to see progress in disarmament and the reduction of international tension.

3. Her Majesty's Government consider, however, that the proposals of the Polish Government raise wider issues to which, nevertheless, they appear to offer no solution. Among these issues is the threat to the security of the members of the North Atlantic Treaty Organisation which might arise, owing to the preponderant strength of Soviet conventional forces, if the Polish Government's proposals were accepted. If the security of Western European countries was to be maintained, it would be essential that any measures which might be taken to reduce nuclear armaments in central Europe should be accompanied by measures to reduce the Soviet preponderance in conventional weapons in the whole of central and eastern Europe. It would be necessary for all these measures to be subject to control and inspection of the most effective kind. It is also the considered opinion of Her Majesty's Government that the question of German re-unification would not be furthered by the adoption of Your Excellency's proposals.

4. Her Majesty's Government have, however, in no way diminished their interest in the solution of the problems of disarmament, European security and Germany. They have in conjunction with their Allies already made constructive proposals dealing with these problems both at the Geneva Conference in 1955 and in the Disarmament Sub-Committee of the United Nations. Her Majesty's Government hope that progress towards a solution of these major problems may be made at the preparatory discussions for a conference of Heads of Government at such a conference itself, or in some other way.

5. I avail myself of this opportunity to renew to Your Excellency the assurance of my highest esteem.

(Signed) E. BERTHOUD.

Oral Answers to Questions — JORDAN (DEFERRED PAYMENT)

Mr. Lipton: asked the Secretary of State for Foreign Affairs why the instalment of £500,000 due from the Jordan Government last month for British stores and installations has been deferred till 1964.

Mr. Ormsby-Gore: The Government of Jordan is one with which Her Majesty's Government have close and friendly relations, and when the Jordan Government decided to ask for deferment of the instalment due on the 1st May, 1958, Her Majesty's Government felt it reasonable to agree.

Mr. Lipton: Is not the Minister aware that at this rate the total amount of £3 million still due to the British Government will never be repaid? Instead of expecting the British taxpayer to submit to one miserable fiasco after another in the Middle East, why not ask the Jordan Government to put the money they are not repaying to useful purposes, such as resettling Arab refugees or doing something else useful with it?

Mr. Ormsby-Gore: We believe that the Jordan Government are doing something useful with it. They are developing their country—and I do not accept the suggestion that this money will never be repaid.

Oral Answers to Questions — SUMMIT CONFERENCE (FOREIGN MINISTERS' MEETING)

Mr. Swingler: asked the Secretary of State for Foreign Affairs what are now the main obstacles to arranging a Foreign Ministers' meeting to prepare for summit talks.

Mr. E. Fletcher: asked the Secretary of State for Foreign Affairs what steps have been taken since the North Atlantic Organisation Conference at Copenhagen to arrange a meeting of Foreign Ministers as a preliminary to a Summit Conference.

Mr. Selwyn Lloyd: There are no obstacles, but the Ambassadors in Moscow have only just begun their exchanges of views with the Soviet Government.

Mr. Swingler: In view of the long delay, and if it is true that there are no obstacles, why will the Foreign Secretary not now propose a date, at any rate for the Foreign Secretaries' meeting? We have been pressing for a date for the summit talks. Would it not be constructive to propose a definite date for this meeting so that they might get on with the job?

Mr. Lloyd: I could no disagree more with the hon. Gentleman. These discussions through the diplomatic channels have begun not unhopefully. I think it has been agreed, in principle, that the discussions shall be in confidence, which, I think, is a good thing. I do think there is a real prospect of a business-like exchange of views on the subject of the matters to be considered on the agenda, and, as I say, I think that the talks have begun not unhopefully. I do not think it would be helpful to try to fix a date.

Mr. Fletcher: Does the Foreign Secretary seriously think that there are any prospects of a Summit Conference being held this year?

Mr. Lloyd: Certainly, I do, if there is the will to carry forward these preparations; and the beginning, as I have said, has been not unpromising.

Mr. S. Silverman: Since the necessity or the desirability of a Summit Conference arises out of the fact that the Foreign Ministers of the various Powers concerned have so far been unable to agree, what exactly is the purpose of having a meeting of those Foreign Ministers before the Summit Conference?

Mr. Lloyd: The answer to that is that it is because the Soviet Government suggested it. But the point, leaving legalities out, is to get some genuine negotiation going, and I have just said that I think this has begun not unpromisingly in the first discussions.

Oral Answers to Questions — NUCLEAR TESTS

Mr. Swingler: asked the Secretary of State for Foreign Affairs what reports he has received from Her Majesty's diplomatic representatives in the Union of Soviet Socialist Republics since the Soviet Foreign Minister's announcement of the suspension of nuclear tests.

Mr. Selwyn Lloyd: I do not know what the hon. Member has in mind. I regularly receive reports on a variety of subjects; it is not customary to disclose their contents.

Mr. Swingler: Can the Foreign Secretary now say whether he regards the announcement by the Soviet Foreign Minister that the Soviet Government were suspending nuclear tests as a genuine move, or whether he still regards it as mere propaganda? Do the reports of the British diplomatic representatives in Moscow indicate that it was a genuine move to try to relax tension?

Mr. Lloyd: The hon. Gentleman's Question was a very vague one and my reply, therefore, was very vague. He is now asking about a specific matter with regard to the Soviet announcement about the suspension of tests. I think that one factor in the Soviet announcement is that it comes immediately at the end of a very large and accelerated series of test explosions. I think that that must be taken into account. On the other hand, I am perfectly prepared to accept it as a genuine offer to suspend tests.

Mr. Bevan: What is the use of the right hon. and learned Gentleman repeating that statement over and over again, when he knows very well that last year the Soviet Union did ask that there should be agreement to hold no further tests after the beginning of this year; and, therefore, that this series of Soviet tests would not have been held if the British and American Governments had then accepted the Soviet offer?

Mr. Lloyd: The question whether one should accept cessation of tests by itself is a matter upon which the views of Her Majesty's Government are well known. We have constantly said that that should be associated with other measures of disarmament. I was asked about a particular statement.

Mr. Bevan: Is not the Foreign Secretary misleading public opinion, or attempting to mislead public opinion—he is obviously failing—when he says that the Soviet suspension of tests should be considered in the light of the fact that it followed a whole series of Soviet tests, when, in fact, he was invited to suspend tests from the beginning of the year?

Mr. Lloyd: I was dealing with the unilateral statement. I was asked about a report about that, and I said that we should take into account the circumstances in which it was made. Had it been made before the Soviet tests were made—[HON. MEMBERS: "It was."]—it would have been a different matter.

Colonel Beamish: Is my right hon. and learned Friend aware that a great many people on both sides of the House regard the mere suspension of tests as being of very little importance indeed, but that what might be really important is whether we can get technical working parties set up to study a system of international control and inspection? Is the Soviet Union making any progress in that respect?

Mr. Lloyd: There are two questions here. In regard to the second part of my hon. and gallant Friend's supplementary question, I maintain that it is of the greatest importance to get a cessation of tests associated with the cut-off in the manufacture of fissile materials and also with some measure of conventional disarmament.

Mr. Swingler: Is the Foreign Secretary aware that a great many people in this country believe we should respond to the Soviet invitation?

Mr. Healey: asked the secretary of State for Foreign Affairs what steps he has taken to organise technical study by experts of the control and supervision of nuclear tests in co-operation with the United States of America and the Union of Soviet Socialist Republics.

Mr. Selwyn Lloyd: Her Majesty's Government have repeatedly proposed that experts from the countries concerned should meet and study a control system for supervising the suspension of nuclear tests. I made the suggestion on behalf of the Western Powers in a speech on 2nd July of last year in the United Nations Disarmament Sub-Committee. It has been reiterated since, the last occasion being the Prime Minister's letter of 21st April to Mr. Khrushchev.

Mr. Healey: Is the Foreign Secretary aware that the House is fully informed of this fact but that a fortnight ago the Soviet Government declared their readiness to participate in such a study? Does he not agree that the confused and

dilatory response of the Government to the Soviet initiative may be regarded all over the world as evidence that Britain does not desire an agreement on this issue?

Mr. Lloyd: The hon. Gentleman should be fair. We are willing to take part in such a study, but the Soviet Government have not yet indicated whether they are willing to take part with us in such a study.

Mr. Bevan: If this study and supervision of nuclear tests reach a satisfactory conclusion, will Her Majesty's Government then be prepared to suspend tests despite the fact that a wider disarmament agreement might not have been reached?

Mr. Lloyd: That is a matter for future consideration. We shall continue to try to get wider agreement.
As for further developments, my right hon. Friend the Prime Minister has said that he thinks this is an appropriate matter for discussion at the summit talks.

Mr. Bevan: Will the Foreign Secretary answer my question? In the event of these present studies reaching such a conclusion that, in fact, the suspension of tests can be satisfactorily supervised, will Her Majesty's Government then be prepared to suspend tests despite the fact that in the meantime a wider disarmament agreement would not have been reached?

Mr. Lloyd: I have made it clear that that is not our position. We are not prepared unilaterally to accept this. But I think that if the experts have agreed upon a suitable system, that is certainly a step forward, and it will make it much easier to bring in as part of a wider agreement.

Mr. Healey: asked the Secretary of State for Foreign Affairs to what extent it is now Her Majesty's Government's policy to seek a cessation of nuclear tests separately from a cessation of the production of atomic weapons.

Mr. Selwyn Lloyd: Her Majesty's Government maintain their view that the cessation of nuclear tests should not be separated from the general question of


disarmament, including the cessation of production of fissile material for weapons purposes.

Mr. Healey: Is the Foreign Secretary aware that now that the American Government are moving in the direction of seeking an agreement separately on the cessation of nuclear tests, opinion in this country and in the world as a whole will be appalled to find that the British Government are now a major obstacle to a step which, if carried out, would not only save tens of thousands of lives but would also prevent the distribution of atomic weapons to an infinite number of sovereign States?

Mr. Lloyd: The first part of the hon. Gentleman's supplementary question is not correct. As to the second part, I have just stated our position.

Mr. Bevan: Is not the right hon. and learned Gentleman aware that this is a matter of the most serious moment and that there is conclusive evidence that there is an overwhelming majority of opinion in this country against the Government's decision—[HON. MEMBERS: "Oh."] Well, try it. Is the right hon. and learned Gentleman not aware that there are three major considerations in favour of this proposition being accepted—first, that if the tests were suspended for a period of time and good will were shown on all sides the international climate would be enormously improved; secondly, that further poisoning of the atmosphere would cease; and that thirdly, other nations would not obtain nuclear weapons? Therefore, very grave dangers might be avoided. Why do not the Government listen to ordinary commonsense in these matters?

Mr. Lloyd: To select one particular subject which is not disarmament in itself and then seek to lead people to believe that great steps could be made would be misleading public opinion. What we have to consider is, first of all, the defence interests of this country which are affected by this matter—the development of our own nuclear weapons. Until we get a balanced agreement which will to some extent cover conventional as well as nuclear disarmament and also the beginning of real nuclear disarmament—which is the cut-off in the manufacture of fissile material—we should be running

great risks in accepting any such proposal.

The following Question stood upon the Order Paper:

Mr. ZILLIACUS: To ask the Secretary of State for Foreign Affairs, whether, in view of the Soviet Government's acceptance of the proposal to appoint experts to work out a system to monitor hydrogen bomb tests, he will now agree to conclude an agreement banning tests as soon as this system is applied.

Mr. Zilliacus: On a point of order, Mr. Speaker. The last word in my Question as printed is a misreading of my handwriting, for which I apologise. It should be "completed" and not "applied".

Mr. Selwyn Lloyd: I do not think that affects my Answer, which is "No, Sir."

Mr. Zilliacus: I admit that the right hon. and learned Gentleman has already replied to this question earlier in answering supplementaries, but will he not reflect that the United States Government themselves are now contemplating suspension of tests and, according to the Observer, this Government are asking them to delay this announcement? Are we not in danger of appearing before the world as nothing better than hydrogen-bomb Herods?

Mr. Lloyd: I really must deny categorically what the hon. Gentleman has just said, either about the contemplation of the United States Government or about our attempting to prevent them to come to any particular decision. I think that I have already dealt with the general aspects of the matter.

Oral Answers to Questions — PARIS CONSULTATIVE GROUP (CO-ORDINATING COMMITTEE)

Mr. Swingler: asked the Secretary of State for Foreign Affairs on how many occasions in the last six months the Paris Consultative Group on trade with China and the Soviet bloc has met; and when he expects to be able to report on the results of these discussions.

Mr. Ormsby-Gore: The Co-ordinating Committee of the Consultative Group met 98 times between 15th November and


16th May. I cannot yet say when it will be possible to make a statement on the result of the present review.

Mr. Swingler: Is it the fact, on the admission of the Under-Secretary, that the Committee has met 98 times and has achieved no results whatsoever? Is that really the situation? In the light of that situation, are the Government going to do anything at all to try to develop trade?

Mr. Ormsby-Gore: If I recollect correctly, the hon. Member was asking very much the same sort of question this time last year about the China differential, and at the end of the consultations I think the result was one of which he and the rest of the House approved.

Oral Answers to Questions — PORTUGAL (TREATIES OF ALLIANCE)

Mr. Benn: asked the Secretary of State for Foreign Affairs (1) to what extent Her Majesty's Government are committed to the maintenance of Portuguese sovereignty over Goa;
(2) to what extent Her Majesty's Government are now committed to the maintenance of Portuguese sovereignty over her colonies;
(3) which treaties between the United Kingdom and Portugal are now in force; and whether all other engagements between the two countries have now been published.

Mr. Selwyn Lloyd: The principal bilateral treaties of alliance between this country and Portugal are those of 1373, 1386, 1642, 1654, 1660, 1661 and 1703, reinforced by the Declaration of 1899. These have all been published in volumes of the State Papers, and there are no engagements of this kind which have not been published. There is, in addition, a considerable number of other bilateral agreements on a wide variety of subjects, including a commercial treaty, but I assume the hon. Member is not referring to these.
As regards the application of the treaties to particular territories and particular circumstances, it would be for the party invoking the treaties to establish a casus foederis.

Mr. Benn: Is the right hon. and learned Gentleman not willing to tell the House to what extent Britain is committed to the maintenance of Portuguese sovereignty over Goa and other colonies in view of the fact that Dr. Salazar has repeatedly claimed that these treaties bind the British Government to the maintenance of this sovereignty, and that he claims this not only through the Treaty but through the North Atlantic Treaty Organisation? Is the right hon. and learned Gentleman not aware of the effect that that evasive answer will have upon world public opinion when a straight question is put to him?

Mr. Lloyd: I do not understand the hon. Member's supplementary question. He has referred, for example, to the case of Goa. I am not aware that any armed attack is contemplated against Goa. If the hon. Gentleman studies my answer carefully, he will realise that it is a wise one to make in the circumstances.

Oral Answers to Questions — N.A.T.O. (SUPPLY OF ARMS)

Mr. Mason: asked the Secretary of State for Foreign Affairs what precautions are being taken to ensure that arms supplied by the North Atlantic Treaty Organisation are not being used in demonstrations by the French Army against the Government of France; what quantity of arms supplied by the North Atlantic Treaty Organisation are under French control in Algeria; and if he will make a statement.

Mr. Ormsby-Gore: No arms are supplied to the French or other member Governments by the North Atlantic Treaty Organisation. The Question does not, therefore, arise.

Mr. Mason: Can we be assured that the N.A.T.O. countries, and particularly Her Majesty's Government, are keeping a close watch on this matter and that, if the situation in France should deteriorate, no N.A.T.O. arms will be used by the demonstrators against the democratically elected Government of France?

Mr. Ormsby-Gore: I think I said in my answer that no N.A.T.O. arms are supplied to the French Government.

Oral Answers to Questions — LEBANON

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs what discussions are taking place with the Government of the United States of America under the Tripartite Declaration in view of the recent incidents on the Lebanon-Syrian frontier; and whether he will make a statement.

Mr. E. Fletcher: asked the Secretary of State for Foreign Affairs what steps he is taking to protect British interests in the Lebanon.

Mr. Shinwell: asked the Secretary of State for Foreign Affairs what official consultations have taken place with the United States of America with regard to the movement of North Atlantic Treaty Organisation forces in the vicinity of the Lebanon.

Viscount Hinchingbrooke: asked the Secretary of State for Foreign Affairs what steps are being taken to meet a request from the Iraq Petroleum Company for the evacuation of British personnel from the Lebanon.

Mr. du Cann: asked the Secretary of State for Foreign Affairs what consultations have taken place with the signatories to the Tripartite Declaration of 1950 with regard to its validity and effectiveness; and what alteration is proposed.

Mr. Zilliacus: asked the Secretary of State for Foreign Affairs whether he will call the present situation in Lebanon to the attention of the Security Council as a circumstance tending to cause international friction.

Mr. Selwyn Lloyd: The responsibility for protecting British and all other foreign interests in the Lebanon is in the first place that of the Lebanese Government. From the information at my disposal, I believe that the Lebanese Government will be able to discharge their responsibility in this respect. Her Majesty's Government have received no request for evacuation from the Iraq Petroleum Company, with whom they are in touch, or from anyone else. Her Majesty's Government are however taking routine precautions.
Her Majesty's Government are in close touch with the United States Government, and with their other Allies, with

regard to the situation. In reply to the Question of my honourable Friend the Member for Taunton (Mr. du Cann), Her Majesty's Government have recently consulted the other signatories of the Tripartite Declaration, and we are all agreed that it remains valid as a declaration of policy. The situation does not however at present seem to be the sort which the Tripartite Declaration was designed to meet.
The recent announcement of the Lebanese Foreign Minister indicates that subversion and incitement from outside the Lebanon is playing an important part in the current disorders.
On the question of referring the situation to the Security Council, I consider that that is primarily a matter for the Government of the Lebanon, but I am having discussions on this matter at the present time. There is much to be said for this course.
With regard to the movement of North Atlantic Treaty Organisation forces, as far as Her Majesty's Government are concerned, there are no plans. If other forces assigned or earmarked to the North Atlantic Treaty Organisation were to be moved, it would be necessary for the Government concerned to notify the North Atlantic Council. No such notification has been made of which I am aware.

Mr. Henderson: In view of the allegations which are contained in the Soviet statement with regard to the Middle East, will the right hon. and learned Gentleman make it quite clear that the Western Governments have no intention of intervening militarily in the situation in the Lebanon?

Mr. Lloyd: The situation is uncertain and obscure, and I cannot make a statement such as that for which the right hon. and learned Gentleman asks. What I will certainly say is that no action will be taken contrary to the Charter or the established rules of international law.

Viscount Hinchingbrooke: Has my right hon. and learned Friend had drawn to his attention the statement appearing in The Times today to the effect that Mr. Dulles last week told leading senators that, in certain circumstances, and if called upon to do so, to render assistance to the Lebanese Government or to protect the lives of American personnel in the


Lebanon, United States forces might be prepared to effect a landing? Does my right hon. and learned Friend realise that a very large majority of the people of this country would wish the British Government to be associated with that position, if need be?

Mr. Lloyd: I do not think it very wise to deal with certain hypotheses which may arise. My noble Friend must be content with the statement I made. This is a serious situation, but it is not clear yet what will happen. We believe that the Lebanese Government will be able to maintain order and, so far as any intervention by ourselves is concerned, I said that it would not be contrary to the Charter or the established rules of international law.

Mr. Shinwell: Can the right hon. and learned Gentleman say whether there is any evidence of external subversive forces outside the Lebanon being responsible for causing disorder, and can he say also, in view of the fact that the United States naval forces are regarded as part of the North Atlantic Treaty Organisation, whether N.A.T.O. was consulted before there was any move?

Mr. Lloyd: Without doubt, there is evidence of subversive influence from outside. I think that there have been cases of arms being run, of frontier incidents and of a great deal of propaganda from outside, and also of citizens of other countries taking part in the disorders. There is a good deal of evidence to that effect. As regards the second part of the right hon. Gentleman's question, so far as I understand it, the Sixth Fleet is not part of the North Atlantic Treaty Organisation forces.

Mr. du Cann: While welcoming my right hon. and learned Friend's reaffirmation of the Tripartite Declaration, may I ask whether he is aware of the view, very widely held, that it urgently needs strengthening and broadening, and that we shall never get permanent peace in this area until it is made perfectly plain that the great Powers will insist upon nothing less? Will my right hon. and learned Friend say whether we are continuing to consult with our Allies and take part in every helpful development there is in this connection so as to strengthen that?

Mr. Lloyd: I will certainly bear my hon. Friend's point in mind. Of course, the Tripartite Declaration did begin:
…having reviewed certain questions affecting the peace and stability of the Arab States and Israel…
I think that most of us consider that the Tripartite Declaration was directed towards that situation and the frontiers of Israel, but I will bear my hon. Friend's point in mind.

Mr. Fletcher: Will the Foreign Secretary say whether, in so far as British naval forces are operating in the Eastern Mediterranean, they are doing so as part of N.A.T.O. forces or acting independently?

Mr. Lloyd: I would like the hon. Gentleman to put that question down. My impression is that they are acting independently.

Mr. Bevan: Will the right hon. and learned Gentleman find out and let us know about that? It is very confusing. When we hear that the United States is a member of N.A.T.O. and the Sixth Fleet is not, and that it is uncertain whether the British Fleet in the Eastern Mediterranean is part of N.A.T.O. or not, we really do not know where the frontiers lie, whether between weapons or between nations.

Mr. Lloyd: What I can say to the right hon. Gentleman is what I said in my original Answer, that there is no question of any British forces assigned to N.A.T.O. being used.

Mr. Zilliacus: I welcome the right hon. and learned Gentleman's declaration that there is much to be said for referring the matter to the Security Council, and I accept his point that it is mainly a matter for the Lebanon Government, but does the Foreign Secretary not agree that it is also the right of other members of the United Nations to refer the matter, if they think fit, and will he give an undertaking that, so far as it does become a matter of international concern, the Government will insist upon it being dealt with through the United Nations on the basis of the Charter and not by any form of armed intervention on any pretext outside the action of the Security Council?

Mr. Lloyd: I have made a carefully considered answer about the possibilities. I agree with the hon. Gentleman that,


although I think that it is primarily a matter for the Lebanon, that does not rule out either the right or, indeed, the responsibility of other States in certain circumstances to refer the matter. But, for the moment, I expect that the Government of the Lebanon have a good deal of other matters on their hands.

Mr. Dugdale: Is the right hon. and learned Gentleman really saying, in his previous answer, that he does not know under whose command the British forces come in this area and who is to give the order as to what they are to do?

Mr. Lloyd: The question I was asked was whether British naval units were being moved which were not part of the N.A.T.O. Command. That is a question of which I should want notice.

Oral Answers to Questions — INTERNATIONAL COURT OF JUSTICE (BRITISH RESERVATION)

Mr. Emrys Hughes: asked the Secretary of State for Foreign Affairs on what date he filed with the International Court of Justice a reservation removing from the sphere of compulsory jurisdiction any question which in the opinion of the United Kingdom affects the national security of the United Kingdom or any of its dependent territories; whether this reservation still remains on the file; and if he will make a statement.

Mr. Selwyn Lloyd: The reservation to which the hon. Member refers was notified to the Secretary-General of the United Nations on 18th April, 1957, as is shown in Command 249, which has been laid before the House. The reservation remains in force.

Mr. Hughes: Will the right hon. and learned Gentleman tell us whether this precludes Scotland from raising at the International Court of Justice any grievance she has under the Treaty of 1707?

Mr. Lloyd: I should like notice of that question, but I should think that the answer is almost certain to be "Yes".

Mr. Younger: Does the Foreign Secretary recollect telling the House in the debate on the Address that this was not the final word of the Government? Can he tell us whether, in view of the

objections which have been raised to what he did by the Secretary-General and other people, there have been international consultations on this matter?

Mr. Lloyd: I cannot yet add to what I said in the debate on the Address. I agree that it is a good time ago now and a great deal of other things have been happening. It is a matter about which, I say again, our final word has not been said.

Dame Florence Horsbrugh: Is my right hon. and learned Friend aware that Scotland has no grievances that she does not feel she can deal with perfectly efficiently by herself without help from outside?

Oral Answers to Questions — EASTERN GERMANY

Mr. Rankin: asked the Secretary of State for Foreign Affairs what reasons prevent this country recognising the East German Government.

Mr. Ormsby-Gore: Her Majesty's Government do not consider that the so-called "German Democratic Republic" has the characteristics of an independent State. It has been created and artificially maintained by the Soviet Government. Her Majesty's Government continue, therefore, to hold the Soviet authorities responsible for the conduct of affairs in Eastern Germany.

Mr. Rankin: In the light of that answer, how can the Government recognise Western Germany which, in relation to the United States, differs little from Eastern Germany so far as support from Russia is concerned? Is not the hon. Gentleman aware that, by dollar aid, in general building and in housing and by various other means, the United States has subsidised Western Germany as much as Eastern Germany is being subsidised by Russia? If that argument is a valid one, surely it is not a very substantial one?

Mr. Ormsby-Gore: Of course, I cannot accept the premise upon which the hon. Gentleman asks his question. It is not just a matter of subsidies; it is the actual conduct of affairs in each country. Furthermore, the Federal Government of Germany came into being as a result of free elections, and there have not been


any free elections, or what the hon. Gentleman would call free elections, in Eastern Germany.

Oral Answers to Questions — SUEZ CANAL (PILOTS)

Mr. Emrys Hughes: asked the Secretary of State for Foreign Affairs if he will enter into negotiations with the Egyptian Government for the purpose of securing the reinstatement of British pilots on the Suez Canal.

Mr. Ormsby-Gore: No, Sir.

Mr. Hughes: But is the hon. Gentleman aware that about two years ago his right hon. and learned Friend instigated an unofficial strike on the Suez Canal among the pilots, some of whom lost their jobs as a result? In view of what was said at the time, that it was impossible to run the Suez Canal without British pilots, can the hon. Gentleman tell us how the Suez Canal is running now and why more ships are going through than there were at that time?

Mr. Ormsby-Gore: The hon. Gentleman asked whether we would negotiate with the Egyptian Government for the purpose of securing reinstatement of British pilots on the Suez Canal. I believe that the answer to that is "No," chiefly because I am not aware of any British pilots who want to be employed by the Suez Canal Company as at present organised by the Egyptians.

Oral Answers to Questions — MIDDLE EAST (SOVIET NOTES)

Mr. Beswick: asked the Secretary of State for Foreign Affairs what discussions have been held or inquiries made in response to the Soviet Notes of 11th February, 1957, and 19th April, 1957, in which a joint declaration was suggested based upon the principles of noninterference in the domestic affairs of the Middle East countries, reciprocal refusal to deliver arms to the Middle Eastern countries, the promotion of economic development in Middle Eastern countries without political terms, the liquidation of foreign bases and the withdrawal of foreign troops from the Middle Eastern countries; and if he will state Her Majesty's Government's policy on these matters.

Mr. Lloyd: The two Soviet Notes to which the hon. Member refers were answered by Notes from Her Majesty's Government dated 11th March and 11th June, 1957, which were published at the time.

Mr. Beswick: Would it be correct to say that those Notes did not give any indication that we were prepared to discuss with the Soviet Union an agreement based upon the principle enumerated in those Notes and which I have mentioned in my Question? Does not the right hon. and learned Gentleman think it rather strange that his back benchers should now be asking for armed intervention in the Middle East again when we have not even tried to get a discussion on the constructive principles set out by the Soviet Union?

Mr. Lloyd: That is a grossly incorrect reference to anything that my hon. Friends have said today. So far as the Soviet Notes are concerned, if the hon. Gentleman will read again the replies of the two dates he will see that the arguments are dealt with. So far as an agenda for future discussion is concerned, that is a different matter.

Mr. Beswick: Did the right hon. and learned Gentleman say in his answer to these Notes that he was prepared to discuss these constructive proposals or not?

Mr. Lloyd: In fact, we did discuss these proposals in the answers and gave the reasons why they were not very helpful.

Oral Answers to Questions — AGRICULTURE, FISHERIES FOOD

Fruit and Vegetables (Prices)

Mr. Short: asked the Minister of Agriculture, Fisheries and Food whether he is aware that the retail prices of tomatoes, lettuce and cucumbers were increased by from 50 per cent. to 100 per cent. during the recent spell of warm weather in Newcastle-upon-Tyne; and if he will now control the retail prices of fruit and vegetables.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): Prices of salad vegetables are frequently subject to considerable fluctuation as a result of changes in supply and demand,


both of which are affected by climatic conditions. There is no evidence that price control would be of any value in these circumstances.

Mr. Short: Is the hon. Gentleman aware that I have raised this matter with his predecessors on a number of occasions during the past few years? Is he also aware that tomatoes went up overnight from 3s. 6d. a lb. to 6s. 6d. a lb.? Is there not now an overwhelming case at least for an investigation into the distribution of fruit and vegetables?

Mr. Godber: With regard to the hon. gentleman's specific point about tomatoes, it should be made clear that there are two very different types available at this time, imported and home grown, and this explains the discrepancy in price. As regards the investigation, the Runciman Committee went into this matter fully and reported last year.

Mr. Willey: Can the hon. Gentleman say when the Government will make a further statement on the report?

Mr. Godber: The hon. Gentleman is perfectly aware that that is well outside the scope of this Question.

Law of the Sea (Conference)

Mr. Hector Hughes: asked the Minister of Agriculture, Fisheries and Food, in view of the results of the recent Conference on the Law of the Sea at Geneva, if he will make a comprehensive statement of the subjects discussed and decisions reached relating to the conservation of fish stocks in the waters usually and traditionally fished by British fishing fleets.

Mr. Godber: My right hon. Friend the Secretary of State for Foreign Affairs explained in reply to my hon. Friend the Member for South Angus (Sir J. Duncan) on 12th May that a White Paper on the Conference is being prepared. In the meantime, I have had placed in the Library a copy of the text of the Convention on Fishing and Conservation of the Living Resources of the High Seas which the Conference adopted. This text is now before Governments for their acceptance.

Mr. Hughes: Does the hon. Gentleman agree that the conservation of fisheries in the North Sea is a very urgent matter and that proper and full consideration of

it was largely frustrated by the fact that the Conference contained a number of representatives from non-maritime nations which knew nothing about the conservation of fisheries in the North Sea? Will the hon. Gentleman take steps to rectify this glaring wrong?

Mr. Godber: I am afraid I cannot undertake to rectify the glaring wrong of the composition of a conference which has already taken place; but I accept the hon. Gentleman's point and these matters are being considered carefully by the Governments concerned.

Cow-heifer Subsidy

Mr. du Cann: asked the Minister of Agriculture, Fisheries and Food whether he will re-introduce the cow-heifer subsidy in order to encourage farmers to fatten suitable animals for beef.

Mr. Godber: Government policy has been progressively directed towards encouraging producers to rear and fatten the sort of animals most suited to meet the demand for more and better quality beef. To reintroduce a subsidy on cow heifers would be a reversal of this policy, and my right hon. Friend does not intend to do so.

Potatoes

Mr. Grey: asked the Minister of Agriculture, Fisheries and Food if he will explain the factors that caused the price of potatoes to rise sharply during the last month in Durham City.

Mr. Godber: Prices of potatoes are determined by market conditions and prospects. My Ministry does not keep any record of prices in Durham, but all my information suggests that increases in the price of potatoes throughout the country during the past month have not been great.

Horticultural Products (Marketing and Distribution)

Mr. Grey: asked the Minister of Agriculture, Fisheries and Food, if he will publish in HANSARD a summary of the study made by his Department on the problem of the retail marketing and distribution of vegetables.

Mr. Godber: I presume the hon. Member refers to the comprehensive review of retail marketing and distribution of horticultural products made by the Runciman


Committee. The Report of that Committee was published in January of last year.

Mr. Grey: Is the hon. Gentleman aware of the general effect of the fluctuation in the prices of vegetables, and does not he think, as the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short) has suggested, that some strict control of prices should be introduced? If he does not agree to this, which I am sure he does, will he set up an inquiry into the prices of vegetables, and report to the House the results of the inquiry?

Mr. Godber: I recommend the hon. Gentleman to read the Report of the Runciman Committee, which did go into this matter at considerable length and came to the conclusion that there is no unreasonable profiteering in vegetables. But these products are subject to considerable fluctuation because as I have said in answer to a previous Question, both supply and demand do change so much with climatic conditions.

Mr. Willey: In view of what the hon. Gentleman has said, will he now tell the House when the Government intend to make a further statement on the proposals made by the Runciman Committee?

Mr. Godber: The hon. Member is aware that my right hon. Friend has informed the House of the position regarding the setting up of an horticultural marketing advisory committee, which is now in the course of being established.

Name of Trap
Price
Conditions of Approval


Imbra Mark I (a)
…
10s. 6d. (While existing stocks last)
Approved for use (i) in rabbit holes and (ii) in artificial tunnels against grey squirrels and ground vermin.


Imbra Mark II
…
15s. 0d.


Juby Trap
…
About 19s. 6d.


Fenn Vermin Trap Mark I
…
—
Approved for use (i) in artificial tunnels against grey squirrels and ground vermin and (ii) against rats and mice on their runs.


Fenn Vermin Trap Mark II
…
(b) —


Fenn Vermin Trap Mark III
…
6s. 6d.


Fuller Trap
…
18s. 6d. ex works
Approved for use against grey squirrels.


(a) The Imbra Mark I trap has been superseded by the Imbra Mark II and is not now in production.


(b) The Fenn Vermin Traps Mark I and Mark II have been replaced by the Fenn Vermin Mark III and they are not now being made.

Ice Cream

Mr. Peyton: asked the Minister of Agriculture, Fisheries and Food if he is aware of the continuing concern of dairy

Regarding the other matters in the Report, my right hon. Friend is still having consultations with those concerned.

Traps

Mr. Remnant: asked the Minister of Agriculture, Fisheries and Food if he will list the names and prices of the traps approved by his Department as suitable alternatives to gin traps.

Mr. Godber: With permission, I will circulate the list in the OFFICIAL REPORT.

Mr. Remnant: Does not the hon. Gentleman agree that the prices are at least twice those of gin traps, and how does he think the law will be enforced with that variation in price?

Mr. Godber: I accept that the price of some of these is higher than the price of gin traps, but I believe that they are efficient and I hope that those concerned will try them out. I am sure that they will be satisfied with the results.

Mr. Hastings: Would the hon. Gentleman find it inconvenient to put samples of these traps in the Upper Waiting Hall so that hon. Members may see that it is possible to set these traps without seriously hurting themselves?

Mr. Godber: I should be happy to look into that proposal; but I do not wish to cause harm to any hon. Member.

Following is the list of approved traps:

farmers that products described as ice cream should contain a certain minimum proportion of dairy produce; whether he has yet received the comments of


interested parties on his proposed amending regulations; and how soon he expects to make them.

Mr. Godber: Under the existing regulations, ice cream must already contain a minimum of 7½ per cent. of milk solids other than fat. The draft of the proposed new regulations, which will have the effect of reserving the description "dairy ice cream" for a product made wholly from dairy produce, will be circulated very shortly. My right hon. Friend must, however, give time for them to be thoroughly considered by all interested parties, and I cannot at this stage say when the regulations will be made.

Mr. Peyton: Does not my hon. Friend think that 7½ per cent. is a wretched figure? Does he really agree that to continue to misuse the word "cream" years after wartime stringencies have gone is a fraud on the dairy farmer and, so far as the public is concerned, a racket? Will he look into this matter again?

Mr. Godber: My right hon. Friend has given careful thought to this matter, but this product has been known by this name now for 17 years and it would be unrealistic at this time to change it. Regarding the use of the word "cream", I would remind my hon. Friend that that word is used in connection with many other products which no cow has ever seen.

Mr. T. Williams: In view of the feeling in all parts of the House, particularly on the benches behind the hon. Gentleman, that there is general disagreement with this abuse of the English language in calling a commodity "ice cream" which practically contains no cream at all, will the hon. Gentleman convey a message to his right hon. Friend?

Mr. Godber: I will naturally convey what has been said in the House to my right hon. Friend, but I think it is important to get this matter in its right perspective. Even before the war there was no requirement to use cream in ice cream, and so far as I know it was not then used.

Mr. Shinwell: May we have an assurance from the hon. Gentleman that the Conservative Party at the next General Election will include in its programme good, sound and wholesome ice cream?

Mr. Godber: The Conservative Party will certainly produce good, sound and wholesome legislation.

F.A.O. (Cocoa Study Group)

Mr. Sydney Irving: asked the Minister of Agriculture, Fisheries and Food what support was given by the United Kingdom delegate to the recent London meeting of the Food and Agriculture Organisation Working Party of the United Nations to a policy of international price stabilisation for cocoa; and if he will recommend such a policy at the present meeting of the Food and Agriculture Organisation Cocoa Study Group in Hamburg.

Mr. Godber: The Working Party of the Cocoa Study Group which met in London recently was concerned with the technical aspects of price stabilisation and questions of policy did not arise. The United Kingdom delegation was instructed accordingly. The Hamburg discussions will be of the same character.

Mr. Irving: In view of the great damage which has been caused to the economies and revenues of the cocoa-producing countries because of these widespread fluctuations, will the hon. Gentleman not get the British Government to take a new initiative in this matter and to use their influence with the United States of America to bring about some sort of price stabilisation scheme?

Mr. Godber: I take note of what the hon. Member says, but any question of the stabilisation of the price of a primary commodity is a very difficult and complicated matter.

Oral Answers to Questions — PENSIONS AND NATIONAL INSURANCE

National Assistance (Rents)

Mr. Lewis: asked the Minister of Pensions and National Insurance how many weekly assistance grants towards rent payment were made at a given date towards the end of April in the years 1957 and 1958 respectively; and what were the average rates of financial grants made on each of these dates.

The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): The National Assistance Board estimates that the number of householders receiving


weekly assistance grants whose grants took account of rent or similar outgoings and rates was about 1,280,000 at 30th April, 1957, and about 1,230,000 at 29th April, 1958. It is not possible to say how much of the assistance granted is attributable to rent as the grant paid, after taking all the needs and resources of the applicant into account, is often less than the rent.

Mr. Lewis: While appreciating that no doubt these people are justly entitled to this assistance, may I ask the right hon. Gentleman whether it is not a fact that because of the Rent Act the Government are directly financing inflation by these grants to the tenants since the grants are going straight into the pockets of the landlords? If they are doing it that way, why are they against giving some assistance for the bus men?

Mr. Boyd-Carpenter: I think the hon. Member is anticipating the supplementary question he no doubt intended to ask on his next Question. The Answer I have just read indicated that the total number of these grants in which rent was taken into account had fallen over the year.

Mr. Lewis: It is the Minister who is, as usual, under a misapprehension. Will he now answer the supplementary question I put to him? Are not the Government financing inflation by forcing up rents and then paying out of the National Insurance Fund National Assistance which goes straight into the pockets of the landlords?

Mr. Boyd-Carpenter: I have rarely heard so much misunderstanding concentrated into so short a space.

Mr. Lewis: asked the Minister of Pensions and National Insurance, in view of the fact that up to 29th March 277,000 weekly assistance grants had been increased by an average of 5s. 3d. to provide for rent increases under the Rent Act, 1957, what were the relative figures at the end of April, 1958.

Mr. Boyd-Carpenter: I am informed by the National Assistance Board that the figure in respect of rent increases under the Rent Act as at 26th April was about 290,000 with an average of approximately 6s. 6d. The figure of 290,000 is the cumulative total of assistance grants increased since the date when such rent increases were first permitted

and does not take account of persons going off or coming on assistance.

Mr. Lewis: Can the Minister give us the reasons why there has been that increase and why the figure has gone up by 5s. 3d. to 6s. 6d.?

Mr. Boyd-Carpenter: Because we have thought it our duty to take care to protect people on National Assistance.

Mr. Lewis: From the Rent Act.

Industrial Injuries (Prescribed Diseases)

Mr. Prentice: asked the Minister of Pensions and National Insurance what are his proposals for issuing regulations at an early date to implement the recommendations of the Industrial Injuries Advisory Council contained in their recent review of the Prescribed Diseases Schedule.

Mr. Boyd-Carpenter: I have accepted the Council's recommendations and draft Regulations intended to give effect to their proposals for amending the Industrial Injuries (Prescribed Diseases) Regulations are being referred to the Industrial Injuries Advisory Council this week. I should like to take this opportunity of expressing my appreciation of the hard and careful work which the Council put into this very useful review.

Mr. Prentice: While thanking the Minister for that reply, may I ask if he will make it clear that it is not proposed to reduce the categories of workers who are covered for tuberculosis?

Mr. Boyd-Carpenter: The general effect of these Regulations is to widen the cover. So far as tuberculosis is concerned, there is on the face of it a small narrowing.

Mr. Prentice: asked the Minister of Pensions and National Insurance if he will institute an inquiry into disabilities of the elbow affecting manual workers, as suggested by the Industrial Injuries Advisory Council.

Mr. Boyd-Carpenter: My Department is already engaged in preliminary discussions with the organisations interested with a view to such an inquiry.

Mr. Prentice: asked the Minister of Pensions and National Insurance whether,


as the recent report of the Industrial Injuries Advisory Council was limited to the terms of prescription of diseases, he will now ask them to examine proposals for extending the list of diseases covered by the schedule.

Mr. Boyd-Carpenter: No special request to the Council is necessary since it is now part of their normal duties periodically to review diseases which may be suitable for prescription.

Mr. Prentice: In view of the fact that in its recent Report the Council suggested it should be asked to look at certain specific diseases, for example, bursitis, but many others, will the Minister be expecting a report from the Council on these subjects, and will he take the opportunity to ask the Council to have another look at the question whether such diseases as emphysema might be prescribed in relation to certain industries?

Mr. Boyd-Carpenter: It has been the Council's duty since the Beney Committee reported—since 1956—to review diseases generally with a view to suggesting the formal reference to it of any which looked promising from this point of view. It has undertaken two fairly wide reviews which covered some of the diseases the hon. Member has mentioned.

Mr. Marquand: Is any study being made by the Council or by the Government of the possible necessity to prescribe radiation sickness as an industrial disease, in view of the large extent of work in the establishments of the Atomic Energy Authority, hospitals and elsewhere?

Mr. Boyd-Carpenter: That is an important Question. I should be grateful if the right hon. Gentleman would put it down.

Mr. J. Griffiths: Is the right hon. Gentleman aware of the growing concern amongst medical men and others that the time has come for serious consideration to be given to scheduling emphysema amongst coal miners as an industrial disease?

Mr. Boyd-Carpenter: As the right hon. Gentleman knows well, that has been a matter of discussion and, indeed, of controversy for some years, but I think he will agree that it does not specifically arise on this Question.

Reciprocal Arrangements (Belgium)

Mr. R. W. Elliott: asked the Minister of Pensions and National Insurance when he expects reciprocal social security arrangements with Belgium to come into force; and whether he will make a statement.

Mr. Boyd-Carpenter: I am glad to be able to tell the House that the Social Security Agreement with Belgium, which was signed last year, has now been ratified and will come into force on 1st June. The Agreement will cover the benefits provided by the schemes of National Insurance, Industrial Injuries Insurance, and family allowances in this country and the corresponding benefits in Belgium. In addition, medical benefits under the Belgian Health Insurance scheme will be available to citizens of the United Kingdom who are employed in Belgium and to certain other persons who are normally resident there.

Mr. Elliott: While thanking my right hon. Friend for that most satisfactory reply, may I inquire how many countries are linked to us by these reciprocal agreements and what the possibilities are for further agreements?

Mr. Boyd-Carpenter: There are some 17 of these agreements now in operation, though I should say that their scope and cover varies widely. There are a number of others at present under negotiation.

Oral Answers to Questions — MINISTRY OF POWER

House Coal (Distribution)

Mr. A. Roberts: asked the Paymaster-General what steps he proposes to take to prevent an uneven distribution of domestic coal throughout the country.

The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin): This is now secured by the House Coal Distribution Scheme. The National Coal Board and the distributive trade are at present studying alternative arrangements for distribution of supplies when decontrol becomes possible.

Mr. Roberts: Is the Parliamentary Secretary aware that much of this trouble and many of these difficulties are blamed on the industry itself, and does he not


think that the distribution of coal should be fully under the control of the National Coal Board?

Sir I. Horobin: I am not certain what the hon. Member means by that. I would certainly agree that the sooner all concerned in this industry look upon the sale of their products as a commercial proposition the better for everybody.

Nuclear Power Station (Snowdon National Park)

Mr. Dance: asked the Paymaster-General if he is yet in a position to make a statement about the outcome of the inquiry into the proposal to site a nuclear power station in the Snowdon National Park.

Sir I. Horobin: Not yet. Before reaching his decision my noble Friend feels that he needs further information about the steps taken by the Central Electricity Generating Board to consider alternative sites in the North Wales area. He has, therefore, asked the Board to submit a memorandum on this subject for his consideration and to send a copy of it to the bodies who appeared at the inquiry in case they may wish to comment.

Mining Materials (Shipping)

Mr. Short: asked the Paymaster-General if he will give a general direction to the National Coal Board that they are to ensure that all ships chartered by the Board to import mining materials are registered in Great Britain.

Sir I. Horobin: I would refer the hon. Gentleman to the reply I gave to similar Questions last week.

Mr. Short: While no one wishes to tie the hands of the National Coal Board permanently in this matter, does not the hon. Gentleman agree that while there is a slump in British shipping, with so many ships laid up around the coast, the Board should charter British ships for the time being?

Sir I. Horobin: I think we must stick to the general principle that we cannot run this industry from this Box. This

is a question entirely for the National Coal Board in the exercise of its ordinary commercial discretion.

Pit Props

Mr. Neal: asked the Paymaster-General what steps he is taking to encourage the import of pit props from those countries which buy British coal.

Sir I. Horobin: None. The buying of pit props is a commercial matter for the National Coal Board.

Mr. Neal: Can the hon. Gentleman confirm or deny that Finland has placed a ban on the import of British coal because our trade in pit props has been diverted to the Soviet Union? What chance does he think we have of selling coal to Russia?

Sir I. Horobin: That is not a matter for the Ministry of Power. The hon. Gentleman should put down a Question to the appropriate Minister.

Iron and Steel Exports

Mr. Chetwynd: asked the Paymaster-General why British exports of iron and steel have declined from a monthly average of 276,000 tons in the first three months of 1957 to one of 237,000 for the same period in 1958.

Sir I. Horobin: The decline in exports of iron and steel is due to the easing of demand in the international market.

Mr. Chetwynd: Is it not a fact that the continental steel producers are now selling in overseas markets at below their home price, and thereby cutting us out of many of these markets? In view of the growing unemployment in the steel industry, will not the Council, in association with the European Coal and Steel Community, do something about this?

Sir I. Horobin: The fact remains that the exports, both in proportion and amount, of nearly all the other main countries—the United States, France, Germany and Belgium—have all fallen off more than the exports from this country. Do not let us be miserable just for fun.

CYPRUS

3.30 p.m.

The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): With permission, Mr. Speaker, I will make a statement on Cyprus.
The Government have been engaged for several months on a review of the Cyprus problem, and are grateful to the House for its forbearance during this time. The Government have recently been in close consultation with the Governor of Cyprus and with Her Majesty's Ambassadors in Athens and Ankara, who returned to London for that purpose.
Consideration of the course of action which the Government propose to recommend to Parliament is almost complete. The House will, however, understand that an announcement cannot be made before the Government have carried out certain diplomatic procedures. These are required both by our friendly relations with our Allies and also in order to provide the best hope of a successful outcome.
As the House knows, the new Greek Government have only just been sworn in after the elections, which followed the resignation of the former Greek Government on 2nd March and of which the results were declared only a week ago. This has meant some unavoidable delay, and the Government must, therefore, ask the House to be patient for a little longer.
In order to give proper time to complete the diplomatic discussions with the interested Governments, as well as other necessary consultations, it seems that the best course would be to postpone a full statement until after the Whitsun Recess. The Government therefore intend to announce their policy in the House as soon as possible after the Whitsun Recess, and in any case not later than Tuesday, 17th June.

Mr. Callaghan: It has always been the desire of the Opposition that the Government should have the fullest opportunity of solving this problem. May I ask the Colonial Secretary whether he is not aware that our growing embarrassment over the last few months has been due to the fact that we felt the initiative about which we were told last

December had petered out and that nothing further was taking its place?
If, in fact, consultations are now going on, as I gather they are, that ambassadors have returned and will shortly be communicating with the Governments to which they are accredited, and if it is the case that the other consultations to which the Colonial Secretary has referred mean also consultations with the Governments with whom Greece and Turkey have relations, then we on our part would not be disposed to press the Colonial Secretary to make a statement, in view of the undertaking he has given us that he will do so by 17th June.
In those circumstances, Mr. Speaker, although we are anxious to avoid a policy of drift—we want decision—we want to give the Government a fair opportunity and my right hon. Friends and I will take the responsibility of recommending to our colleagues that we should not have a debate on this matter before Whitsun.

Mr. Lennox-Boyd: I think that the general feeling of the House would be in sympathy with what the hon. Gentleman has said, and I am very grateful to him for saying it. I can give him an assurance that it is our intention to complete the necessary diplomatic discussions with the interested Governments as well as other necessary consultations. I repeat that I am very much obliged for the hon. Gentleman's understanding in this matter.

Mr. Clement Davies: May I ask the right hon. Gentleman two questions? In passing, may I say that I quite agree about postponement for the time being. As I understand, there are to be some further consultations with the Greek Government and the Turkish Government, but the people most involved are the people of Cyprus. Is the right hon. Gentleman, therefore, in consultation with anybody from the island of Cyprus? Is it intended to get into communication with Archbishop Makarios?
Secondly, do I understand that in spite of the consultations with the Greek and Turkish Governments, the responsibility for what is taking place and for what must take place is that of Her Majesty's Government, and Her Majesty's Government alone?

Mr. Lennox-Boyd: Though Her Majesty's Government would prefer to leave the timing and the method of doing this to the Governor, we think that leaders of both communities in the island should be given some advance information.
I agree with the right hon. and learned Gentleman that it is for Her Majesty's Government to state their intentions in this matter.

Mr. Brockway: While welcoming what the right hon. Gentleman has said about some consultations with representatives from Cyprus, may I ask him whether, simultaneously with the approaches to the Governments of Greece and Turkey, he will accept the suggestion of discussion with representatives of the people of Cyprus, including the Turkish minority?

Mr. Lennox-Boyd: I have already answered a question on that point, in which I said that I would prefer to leave the timing and method of sounding leaders of local opinion to the Governor.

NEW MEMBER SWORN

Gerald William Reynolds, esquire, for Islington, North.

Orders of the Day — FINANCE BILL

Considered in Committee.

[Sir CHARLES MACANDREW in the Chair]

Clause 1.—(RATES OF TAX, AND DESCRIP TIONS OF CHARGEABLE GOODS.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

3.38 p.m.

The Chairman: I think it will be for the convenience of the Committee if we have a general discussion on Purchase Tax on Clause 1 and deal with the specific articles when we come to the First Schedule.

Mr. Harold Wilson: I am sure that will be for the convenience of this side of the Committee, Sir Charles. Are we to understand that the debate on the Clause will deal with the principle of the Purchase Tax and the question of whether it is right to have four rates, seven rates, three rates or any other number of rates; in other words, the general question of the points raised by the Chancellor, the method of collecting Purchase Tax, and so on, but that any points on individual items which come up in separate Amendments would be best left until the debate on the First Schedule?

The Chairman: I think that that would be for the convenience of everybody.

Mr. Eric Fletcher: Before we proceed, Sir Charles, may I draw your attention to the fact that there are the following Amendments down in the names of myself and some of my hon. Friends: in page 1, line 20, to leave out "Accordingly"; in line 21, to leave out from beginning to "shall" in line 24; in page 2, line 10, to leave out "October" and insert "September"; and in line 10, to leave out from "fifty-eight" to the end of line 11?
I understand that those Amendments are not selected, but may I point out that they were put down for a specific purpose? There are a number of Amendments to the First Schedule, but no Amendments on the Notice Paper to the Second Schedule. The reason for that is that in so far as the Amendments to the


First Schedule were carried they would involve consequential Amendments to the Second Schedule. I understand that you do not regard it as necessary, Sir Charles, for us to put down Amendments to the Second Schedule, but that you would allow us to put down Amendments if necessary at a later stage.

The Chairman: I do not intend to be very severe, but I think that to put down all the consequential Amendments would make the Notice Paper very heavy. It does not seem to me to make sense.

Mr. Gerald Nabarro: On a point of order. Would it not speed our proceedings if it were convenient for us to take the two Amendments to the First Schedule standing in the name of my hon. Friend the Member for Barry (Mr. Gower) and myself on the Question, "That the Clause stand part of the Bill," as the arguments are very substantially the same, namely, in Schedule 1, page 29, line 9, to leave out "60"and insert "15"; and in line 11, to leave out "30"and insert "15"?

The Chairman: Certainly not. Neither of those Amendments has been selected.

The Financial Secretary to the Treasury (Mr. J. E. S. Simon): Before we begin the debate on Purchase Tax, I think it might be convenient if I said a word or two on the sheer mechanics of this Clause, and on the relationship of the First and Second Schedules, to which the hon. Member for Islington, East (Mr. E. Fletcher) has just referred.
The First Schedule and subsection (1) of this Clause amend the existing Purchase Tax law, and, according to subsection (3), the change comes into effect in accordance with the Budget Resolutions on Budget day, with the single exception which is dealt with in the Schedule—the case of greeting cards—where the change in tax came into effect on 21st April.
The Second Schedule effects no changes in taxation, but it does effect a new layout in the Purchase Tax Schedule, which I think will be for the general convenience of traders. It is a simplification, and, I hope—and I think this has been accepted—an improvement. That comes into effect, according to subsection (3), on 1st October, which is the first and most convenient accounting period for traders

after the Finance Bill has been passed, and is also the first date on which the new print of Notice No. 78, which is a simplification of the Second Schedule, can be placed in the hands of traders.

Mr. Douglas Jay: I wish to thank the Financial Secretary to the Treasury for that brief explanation, which we shall no doubt examine later, but which, I think, has made the position clear to the Committee. I think it is appropriate that, at the outset of this annual exercise in which the Committee examines in detail quite a number of taxes, we should have a general look at the Purchase Tax, about which there has been a good deal of controversy both in the House and in the country in recent months.
This Clause provides that certain changes in the Purchase Tax shall be made. In forming our opinion whether we welcome these changes, we ought to think for a moment about the general direction in which we all want to see the Purchase Tax move. It is hard to say whether a particular direction is right unless we know the general destination to which we want to go. I say straight away that we accept, at any rate, some of the aspects of the general direction in which the Chancellor is moving this year. At least, he has moved most rates of Purchase Tax, if not all, downwards, and is also moving in the direction of greater simplicity. Both of these objectives we welcome, but we are not nearly so pleased with the way he has done it, nor with some of the arguments which he has advanced for it, nor, even, with the objective to which he says he is moving.
Much nonsense is talked about Purchase Tax, not merely by the hon. Member for Kidderminster (Mr. Nabarro), but by all sorts of people. It seems to me, and, I think, to most of us, that if we are to have indirect taxation at all, there is at least as good a case for the taxation of things like furs and jewellery as for the taxation of tobacco and beer. There is a case for a reasonably simple form of indirect tax which falls mainly on the more luxury type of consumer goods, and perhaps, also, on some of the amenities, while exempting the real necessities.
The Paymaster-General, in one of our earlier debates on Purchase Tax, divided the goods into three classes: first, the


luxuries; secondly, the amenities; and, thirdly, the necessities. I think that for purposes of a general discussion that is quite a good classification, and, without going into detail, I will adopt it for the purposes of my argument.
3.45 p.m.
I was struck by an article which appeared a month or two ago in the Spectator by the former hon. Member for Ealing, South, Mr. Maude, who has formally left this House. He was reviewing a book by an American expert, who was arguing that there are some merits in the British Purchase Tax, as compared with the sales tax in a number of American States. The former hon. Member for Ealing, South expressed his amazement that anybody should think that these arguments should be advanced at all. I was rather amazed myself by the naivety of the hon. Gentleman's own amazement, because the argument which the expert was advancing was very similar to that frequently put forward to the House in recent years.
It seems to me that, in this argument in favour of what is called a sales tax, as opposed to the Purchase Tax today, which we hear from some hon. Gentlemen opposite, there are two really quite separate arguments which get mixed up and cause confusion. The first is the purely administrative one. Is it better that this tax should fall at the retail stage or at the wholesale stage, as it does now? The second one is the fundamental social argument whether we want the weight of the tax to fall more heavily on a group of some luxury items, or whether we want a general tax on practically all the consumer goods bought by the ordinary people.
As to the first argument, the purely administrative one whether it should be levied at the retail or the wholesale stage, I agree almost entirely with what the Chancellor said on this topic in his Budget speech. Though perhaps his hon. Friend the Member for Kidderminster would not agree with him, he seemed to me to leave very little to be said on that issue. If we are to have this sort of tax, I should have thought that the complications would have been clearly and immeasurably greater if it was to be imposed on a vastly greater number of retail outlets, as they are called in the trade.
The other issue is entirely separate and far more important. Do we want a general tax falling on all sorts of consumer goods, whether they are necessities, amenities, luxuries or anything else, without regard to the social effects at all? We say that that would be a most reactionary and most undesirable form of tax, and we emphatically do not wish to move in that direction. The hon. Member for Kidderminster, in some of his remarks and Questions on this subject, has, under the guise of arguing for simplicity, been arguing for reaction. He has attempted to convey the impression that we cannot have a simpler tax without a general tax falling on everything.

Mr. Nabarro: Quite wrong.

Mr. Jay: We shall be very interested to hear the hon. Gentleman's arguments later in the afternoon. Perhaps he agrees with us. It seems to me that a tax which falls more heavily on the less necessary things is a perfectly legitimate weapon for securing greater social justice in the tax system. If we stand for social justice in our direct taxes—and on this side of the Committee we certainly do—I do not see why we should not favour that in our indirect taxes, also.
The only reason why this argument for the reactionary general sales tax idea is made to look at all plausible is that it becomes further confused with a third issue, and that is how to get rid of these complicated and often ridiculous demarcation anomalies and make the whole thing simple. One very obvious and plain fact in all this controversy is that if there are to be fewer anomalies and absurdities, there must be fewer rates.
The anomalies all spring from multiplication of the number of rates. It is no good blaming Customs and Excise for all these vast complexities and ingenuities, because if Parliament says, "Let there be seven or eight", Customs and Excise officials are bound to work out how the rates fall and to present us with the extraordinary subtleties and surprises which we find in the famous Notice No. 78, which is presented by Customs and Excise every year.
The direction of fewer rates was that in which we moved during the period of the Labour Government. In 1948, after a great deal of reorganisation and reform, we got down to three rates, plus


exemption, three rates plus zero. Then, by all sorts of shifts and expedients and reversals of policy, the Lord Privy Seal worked up again to eight rates, that is to say, seven plus zero. All those changes were supported in the Division Lobby by the hon. Member for Kidderminster, who voted against all our Amendments which would have led to a simpler tax.

Mr. Nabarro: I supported them in the Division Lobby because, with one exception, in the autumn of 1955, all those changes resulted in a lower overall application of the tax, although it is true that it meant a multiplication of the rates, with which I have generally been in disagreement.

Mr. Jay: But even that is not true, because the changes which the hon. Member supported increased the total yield of the tax from £290 million in 1950–51 to £490 million at present.

Mr. F. A. Burden: The important year of the Labour Government was 1951–52, because in 1951 the Labour Government considerably increased Purchase Tax on a number of goods, so that is the year which should be taken for comparisons.

Mr. Jay: I have given the estimated revenue for the year following the Budget of 1951, in which some rates were lowered and others raised and in which some articles were exempted.
I do not know whether the Committee realises that even after the reductions, for which the Chancellor claimed much credit in his Budget speech, the total yield of the tax will still be £490 million in the coming year, which is only £4 million less than it was in the year which has just ended. Therefore, having raised the total yield of the tax from £290 million to £494 million, the Chancellor is reducing it by a mere £4 million in this Budget.
That appears to suggest, incidentally, that in making his Budget calculations the right hon. Gentleman has assumed that prices will continue to rise during the coming year. He has told us that we cannot assume a general expansion of production and consumption, which is said to be not possible until an indefinite date. He has reduced some

rates of Purchase Tax, but he has assumed that the total yield will be almost the same as for last year, and that appears to mean that he expects a number of increases in prices.
We say that it is perfectly possible, within reason, to combine a measure of both simplicity and greater social justice with this tax. If one sets out to have fewer rates, with necessities exempted, it should be possible to get a reasonable social justice and reasonable simplicity at the same time. What worries me most about the Chancellor's remarks is that that does not appear to be the Chancellor's aim. He used one remarkable sentence in his Budget speech when, speaking of Purchase Tax, he said:
Ideally, one may say that it ought to apply to all consumer expenditure."—[OFFICIAL REPORT, 15th April, 1958; Vol. 586, c. 70.]
That seems a most extraordinary statement and in our view it is the exact reverse of the truth. That would be not an ideal tax, but the worst possible form of an indirect tax.
In saying that, the Chancellor ignored the history of Purchase Tax. It was introduced in the Budget of April, 1940, and in the form in which the then Chancellor, then Sir John Simon, introduced it, it covered all clothes, including children's shoes and clothes, and even things like books and newspapers. It was as a result of opposition and argument, mainly from the Labour side of the House, that it was turned into a far fairer tax which discriminated against less necessary articles of consumption. As the process went on, the great bulk of clothes and boots and shoes and furniture, to mention the main items of house hold expenditure, were altogether exempted, under the Utility scheme.
Even now, when the Chancellor makes a gesture towards greater simplicity and some fall in rates, he includes miners' protective helmets and other items which were not included before—and it is that which makes us uneasy. I do not know why every Chancellor under the present Government has increased the tax on a number of necessities and then retreated a few weeks or months afterwards. Is it true on this occasion, as with the Lord Privy Seal, that the Chancellor did not examine the tax schedules before making his Budget speech?
There is another reason, which may be even more important and which is


apart from the pure argument of social justice, why the right way to frame the tax is to discriminate between household necessities and less necessary goods. A tax on necessities inevitably encourages and stimulates wage claims. If the prices of household goods, goods which have to be bought by every man for himself and his family, are raised, claims for higher money wages are encouraged. On the other hand, if there is a tax on other types of goods, such as furs and jewellery and possibly even cosmetics—although I should not put so much emphasis on the tax on cosmetics—that does not have the effect of encouraging wage claims.
It is, therefore, perfectly clear, and should have been clear to everybody all these years after the war, that a tax on household necessities is not merely unfair, but inflationary. So far as Purchase Tax falls on those things and on some of those on which the Chancellor is increasing the tax, it is an inflationary tax. So far as it falls on luxuries and perhaps some amenities, then, so far as it absorbs a certain amount of purchasing power which would otherwise go to less essential expenditure, it can be reasonably claimed to be a disinflationary tax.
The series of Governments since 1951 have never understood that. They have had no principle in all their changes in Purchase Tax from year to year, and that is why we had an increase in the tax on pots and pans and other household goods in the autumn of 1955, and why it was put on a whole range of textile goods, whether they were essentials which everybody had to purchase or less necessary textiles, and subsequently removed. Over the last four or five years we have had a whole series of shifts and changes in the present Government's treatment of this tax.
4.0 p.m.
We say that there should be some principle guiding the framing of the tax in the future. To sum the matter up briefly I would say—and I am sure that the hon. Member for Kidderminster will not agree—that the principle should be, first, that the rates should be fewer in number, so as to achieve much greater simplicity and the absence of all this intolerable demarcation and complication. I should not like to be too dogmatic, because we cannot look forward to future circumstances and cannot say precisely how many rates there might be, but it may

be that two rates, plus zero—which would correspond to the Paymaster-General's classification of the necessities, the amenities and the luxuries—would be the right number of rates to reach finally.
At any rate, we should try to reduce the number, and exempt a very large class of the outright necessities. No doubt we can change the tax only gradually; it certainly cannot be done in one fell swoop, but in that way it should be possible to achieve the three objectives which hon. Members on this side of the Committee think that the tax should aim at.
The first is to get rid of the anomalies and complications which the hon. Member for Kidderminster has rightly laid his finger upon, in respect of the tax as it now stands; secondly, by way of the tax to achieve rather greater social justice, by discriminating between the different types of consumer goods; and, thirdly—which the Government have not done at all—to assist in the battle against inflation and the keeping down of the cost of living by sweeping the tax away altogether from household necessities and essential goods.

Mr. Nabarro: The right hon. Gentleman's speech seemed a little incongruous. In the early stages he devoted a good deal of time to castigating me roundly for having the temerity to advocate a single rate of tax on certain consumer goods. He followed by moving in my general direction for a simplification of the purchase tax, for he readily confessed that two rates of tax would be better than four rates, as I formerly confessed that four rates are, no doubt, better than seven rates.
I do not wish to be misunderstood as to my intentions. As always, they are strictly honourable. I said very clearly and precisely, in well-chosen words—[HON. MEMBERS: "Oh."] oh, yes, in very well-chosen words—in the Second Reading debate, that I do not mind whether a tax of this kind is called a purchase tax, a retail sales tax or a turnover tax. The single thing at which I am aiming is that it should be non-discriminatory in character, whereas the right hon. Gentleman who impugned my motives was under a slight misconception in that he seemed to think that I had not realised that Purchase Tax is only another way of extending the collection of tax at the


wholesale point. A sales tax, as operated in the United States of America is, in contradistinction, a method of collecting a consumer indirect tax at the point of retail. It has the advantage that retailers do not have to tie up money in tax-paid stocks.
It is important that the right hon. Gentleman should understand exactly what are the differences between us, and I want to quote what I said in the Second Reading debate, because there is a vast body of opinion outside the House which strongly supports my view, and which is to be found in every branch of trade and industry. I said:
I am not pleading for a retail sales tax. I am not pleading for a turnover tax. I am not pleading for the Purchase Tax. I am pleading only for one, uniform, non-discriminatory rate of indirect taxation on certain consumer manufactured goods. Call it what one may. It may be a purchase tax levied at the point of wholesale, as at present, at a uniform rate of 20 per cent. on certain articles. It may be a retail sales tax collected over the counter in the American fashion—which means that the retailer does not tie up in his stocks any money in respect of tax—at 15 per cent.
It may be a turnover tax, as practised by the West Germans, at a very low level, and recently advocated, I see, in a journal called the Director…"—[OFFICIAL REPORT, 12th May, 1958; Vol. 588, c. 98.]
There are three contrasting yet different means of raising the revenue required by the Chancellor. He can adjust the rate of tax under any of those three heads according to the total revenue required by him.
It is preposterous to say that any one of these systems is inefficient, for they are widely practised overseas. Whichever system is selected I do not mind, so long as it is non-discriminatory, uniform and at a single rate.

Mr. Jay: Does the hon. Member include clothes, boots and shoes, and furniture in his general tax?

Mr. Nabarro: I shall cover all those points. Although the right hon. Gentleman may not agree with me, I shall be completely frank about them.

Mr. Roy Jenkins: Will the hon. Member include foods and services in his tax? If not, why does he refer to it as being non-discriminatory?

Mr. Nabarro: I shall deal with that point. I wish to make my own speech.

Mr. Jenkins: It would be convenient if the hon. Member answered now.

Mr. Nabarro: It would not be convenient to me to do so now. Perhaps the hon. Gentleman will allow me to make my speech in a fashion most convenient to myself, and which will no doubt best suit the needs of the Committee.
There is no doubt that the Chancellor of the Exchequer has a great deal of sympathy with my views. I have just reread what he said in the Second Reading debate, and I think the Committee should bear in mind his comments. He said:
I hope that I made it clear also in my Budget speech that we ought not to turn our backs on the principle underlying most of these suggestions for a sales tax, the principle of levying indirect taxation at as low a rate as practicable on a wide range of articles."—[OFFICIAL REPORT, 12th May, 1958; Vol. 588, c. 153.]
That is generally the direction in which I want this Government to move.
I want to talk about the industrial aspect of the matter for a few moments. In its memorandum of recommendations to the Chancellor of the Exchequer prior to his Budget, the Federation of British Industries asked particularly that there should be some clarification of the intention in regard to Purchase Tax, and also a statement of the criteria which dictate the application of a particular rate of tax to a particular product. At present, we know none of these things, other than the very general statement made by the Chancellor that Purchase Tax is for the purpose of raising revenue.
The Federation of British Industries used words, to which I thought the Committee might want to have some regard this afternoon. It said:
If the tax on consumption is to be retained on grounds of revenue and purchase tax now produces about one-tenth of the entire revenue, then the tax should be designed for that purpose and its tendency to be a sumptuary tax should be removed.
That is a very real objection to the present arrangement, and it is raised by British industry as a whole.
I have suggested a flat rate of Purchase Tax at 15 per cent. We need not call it Purchase Tax. The phrase is an expression which has grown up with us. It is


really the application of the point of collection at the wholesale level. If we keep to the wholesale level and do not switch to the retail level a flat rate of 15 per cent. for Purchase Tax is perfectly practicable. I wish to explain to the Committee, in terms of the simplest arithmetic, why it is practicable.

Mr. Leslie Hale: The hon. Member is now suggesting that the colonel's lady and Judy O'Grady are sisters under their Purchase Tax.

Mr. Nabarro: The colonel's lady and Judy O'Grady were born equal and will no doubt die equal. I shall come to that point, which is an important one.
It has often been suggested that it would not be possible to raise the sum of money which the Chancellor requires from Purchase Tax were there a fiat rate. I hope to show this afternoon that it is quite practicable. In fact, under the present arrangements, proposed in the last Budget statement, the 60 per cent. rate of tax will raise £209 million; the 30 per cent. will raise £178 million; the articles at 15 per cent. will raise £45 million, and those at 5 per cent. will raise £58 million, giving a total of £490 million.
If a flat rate of Purchase Tax at 15 per cent. were applied, only to those articles at present taxed—and this is the answer to the point made by the hon. Member for Stechford (Mr. Roy Jenkins)—the yield on those articles which are now at 60 per cent. would be £52 million; the yield on those articles now at 30 per cent. would be £89 million; the yield on the articles remaining at 15 per cent. would be £45 million, and the yield on those currently at 5 per cent. would be £174 million. A total of £360 million.
I readily concede that there must be ups and downs, and that if there is a flat rate of tax people who are paying 5 per cent. at present on a range of articles which some folk may consider to be near necessities may have to pay 15 per cent. On the other hand, the tax on the whole range of articles currently taxed at 60 per cent., many of which are by no means luxuries, and the whole range of articles currently taxed at 30 per cent. would come down to 15 per cent. If this 15 per cent. rate were applied only on articles currently taxed for Purchase Tax, it would yield £360 million.
The Chancellor himself has shown clearly to the Committee that by reducing the rates of Purchase Tax one might expect a modest increase in consumption. That is what he said in his Budget speech and what he repeated when winding up the debate on the Second Reading of the Finance Bill. It would not be unreasonable to say, therefore, that if we levelled off at the 15 per cent. rate of tax, the increase in consumption that would result from it would substantially enhance the aggregate revenue.
In fact, at today's level of consumption, on everything with a flat rate of 15 per cent. it is my estimation that we should raise £400 million and within twelve months that figure would, in my opinion, rise to a figure of £460 million. Thereby, with a single rate of Purchase Tax, we should almost exactly equal the amount raised by the highly discriminatory system which we have today.

Mr. Jay: Is not the hon. Gentleman advocating the tripling of Purchase Tax on a very large range of articles—boots, shoes and furniture—which are now at 5 per cent.?

Mr. Nabarro: If the right hon. Gentleman will allow me to complete my speech, I am also advocating cutting by three-quarters, that is, reducing to one-quarter of their present level the rates of tax, for example, on television sets, radios, motor cars and a wide range of goods, including essential cosmetics.

Mrs. Eirene White: indicated assent.

Mr. Nabarro: The hon. Lady who is nodding vigorously has an Amendment on the Notice Paper for cutting the Purchase Tax on commercial vehicle chassis from 30 per cent. to 15 per cent. There would be a very wide range of goods which would come down greatly, to offset those goods currently at 5 per cent. which would move up.

Mr. John Hall: Does my hon. Friend believe that it would be a good thing to decrease the Purchase Tax on television sets, the sales of which, by and large, are increasing, and yet increase quite considerably the Purchase Tax on furniture? The furniture industry is at present going through a rather difficult time.

Mr. Nabarro: I realise my hon. Friend's constituency interest in furniture, but this is much more than a single constituency issue. I could plead, for example, for further relief on carpets, but I have no intention of doing so today.
The issues underlying the raising of this huge sum of money are far wider than a single constituency interest. The right hon. Member for Bishop Auckland (Mr. Dalton), speaking in the Budget debate, emphasised the view which, I think, expresses the view generally subscribed to by the Opposition, when he said, on 16th April:
The tax should fall most heavily on luxuries, less heavily on intermediate goods which are neither luxuries nor real necessities, and exempt necessities altogether."—[OFFICIAL REPORT, 16th April, 1958; Vol. 586, c. 206.]
4.15 p.m.
That is a fair statement, I think, of the Opposition view. It is not my view and it is not the view of many others who sit on this side of the Committee, or of industry, for this reason, that it is impossible in peacetime and in an expanding economy to define what is a luxury. For example, is a mink coat a luxury? If anyone in the Committee answers, "Yes"—[An HON. MEMBER: "Yes."] An hon. Gentleman has said, "Yes". May I reply that it seems rather extraordinary that a mink coat should be taxed at 30 per cent. and at the same rate as a commercial vehicle chassis, which is one of the most important single items of capital production equipment for industry. Why should a mink coat, which is generally regarded as an absolute luxury because most of us cannot afford it, be placed on the same level as an article of capital equipment for industry?

Mr. Donald Chapman: Mr. Donald Chapman (Birmingham, Northfield) rose——

Mr. Nabarro: I have given way many times already. This is the Committee stage of the Bill and I do not want my speech to be too long.
I find it almost impossible to decide, and I think that the Chancellor does as well, whether, for example, a bicycle is a luxury. After all, it transports millions of people to and from work, especially in a bus strike, every day, yet it is taxed at 30 per cent. Is a sewing machine for the home regarded as a luxury? It is

taxed at 30 per cent. It should not be, in my opinion. It has been taxed at 30 per cent. for many years. A radio set, which I would say is absolutely essential in practically every home today, at least if we are to maintain reasonable living standards, is taxed as the highest luxury rate at 60 per cent. A television set, similarly, is taxed at 60 per cent. I believe that it is impossible in conditions of an expanding economy and in times of peace, to decide what is a luxury and what is not a luxury.

Mr. Chapman: Does the hon. Member realise that if he carries on this argument it would lead him to tax food to the same degree as alcohol and tobacco?

Mr. Nabarro: Really, the hon. Gentleman ought to leave the Committee if he cannot understand simple English words. I said a few moments ago, and I proved it by explaining very carefully all the relevant figures, that an equal sum in revenue could be raised by taxing at a flat rate only the articles which at present attract Purchase Tax. I have said that there is no such a thing as a luxury in times of peace with an expanding economy and I believe that that is the case.
I wish to discuss one or two articles which fall into these schedules. Might we consider three of the groups of manufactured goods which now attract Purchase Tax at the highest rate, therefore declaring them to be luxuries. Are toilet preparations really luxuries? I doubt whether any woman in the country would subscribe to the view that her lipstick or her face powder is a luxury. Even so, a very wide range of absolutely essential toilet preparations—not only those used by women, but some used by men and women—come within this range—[HON. MEMBERS: "Turn round."] I can speak to my right hon. Friend as well as talk to the hon. Gentlemen opposite——

The Chairman: The hon. Gentleman had better talk to me. We are dealing later with the specific articles he mentioned, so I hope that he will not develop his argument too far.

Mr. Nabarro: I shall not develop it in detail, but I will say one word about them—that I do not believe they can genuinely be classified as luxuries, any


more than the motor car manufactured so extensively in the constituency of the hon. Member for Northfield (Mr. Chapman), who persists in interrupting me.
Of the motor cars sold on the home market, it is estimated that 75 per cent. are sold for business and professional purposes and many of those vehicles, owned by companies attract a special annual depreciation rate of 25 per cent. per annum. Thus, the Purchase Tax paid on those cars is really an interest-free loan to the Treasury for the length of the life of the car. I will develop that argument when we discuss a special Amendment on the topic which appears later on the Notice Paper in my name.
Having mentioned the 60 per cent. rate, I wish to say a word about the 30 per cent. rate. In our Budget debates last year I laid great emphasis on the fact that there was an extraordinary distinction between all the electrical labour-saving appliances for the home, which were taxed at 60 per cent., and the equivalent manually operated appliances which were taxed at 15 per cent., or not at all. This year, the Chancellor has reduced the figure of 60 per cent. to 30 per cent., and thereby made the position a little better. But he is still putting a premium on drudgery in the home. I can see no reason why he should think it desirable to tax the most modern domestic electrical appliance at 30 per cent., which is twice or more the rate of the tax which he applies to the manually operated equivalent. In my view that is one more reason why we should have an average or mean rate of tax on the manually operated and the electrically operated labour-saving home domestic equipment, by imposing a single rate of tax at 15 per cent.
This is not the time, nor is it the place, to develop arguments about the hordes of anomalies remaining in the Purchase Tax Schedule. Some regard ought to be had to the damage being done to industry, notably the motor car industry, centred in the constituency of the hon. Member for Northfield, whose constituents will not be very pleased with him for opposing my efforts to reduce the Purchase Tax on the vehicles which are made in his constituency. The motor industry as a whole is in no doubt whatever about the urgent need to reduce Purchase Tax on its products.

Mr. Arthur Moyle: Nor is any other industry. Every industry is keen on having Purchase Tax abolished.

Mr. Nabarro: The hon. Gentleman evidently did not listen to the continuous stream of interruptions about motor cars from his hon. Friend the Member for Northfield.
The motor industry, in the February issue of the "Motor Industry Bulletin", used some very significant words, that home sales are at least 25 per cent. less than would be the case if the tax on purchases of cars in this country were comparable to that in Western Germany and that the resulting adverse effect on our costs must certainly be of the order of at least 10 per cent. Therefore—these are my words—the effect of Purchase Tax on cars is to place the British car manufacturers at a disadvantage to the extent of 10 per cent. compared with the West German equivalent. The hon. Member for Stechford is looking puzzled——

Mr. Roy Jenkins: indicated dissent.

Mr. Nabarro: He is not? I am sorry. I will explain this to the hon. Member gratuitously. In Germany, the home market turnover tax is a 4 per cent. Here, it is 60 per cent. Purchase Tax, and there is some difference indeed between 4 per cent. and 60 per cent.
The "Motor Industry Bulletin" goes on to say that
the home market therefore cannot be restricted without restricting, also, the industry's competitive power abroad because of such serious consequential cost increases
arising from Purchase Tax.
It was the Chairman of the British Motor Corporation, which is centred in the constituency of the hon. Member for Northfield, who said at the recent annual meeting of his Corporation, when urging that Government policy such as Purchase Tax should be revised to give us parity with foreign competitors:
Our policy must be to make trade free to meet free trade.
I entirely agree with him.
So long as there are these highly discriminatory rates applied not only to motor cars, radio sets and television sets, but to mink coats and commercial vehicle chassis, or any other articles


falling within the 60 per cent. or the 30 per cent. Schedule, it is a grave deterrent to increasing exports and it has a seriously detrimental effect on expanding trade in markets overseas. Though there may well be sectional interests of the kind represented to me by my hon. Friend the Member for Wycombe (Mr. John Hall), which would feel aggrieved if Purchase Tax on furniture went up from 5 per cent. to 15 per cent., surely we must have regard to the fact that the export of furniture is relatively small compared with the export of motor cars, radio sets, television sets—

Sir Arthur Vere Harvey: And carpets.

Mr. Nabarro: Yes, and carpets, I am obliged to my hon. Friend. But the tax on carpets would not change. The tax was reduced from 30 per cent. to 15 per cent. in 1957, and under the "Nabarro Scheme" carpets would remain taxed at the flat rate and uniform level of 15 per cent.
My hon. Friend the Member for Wycombe should have some regard to the interests of British industry generally, and the fact that if we are to continue to expand our overseas trade—especially if we are to enter into any sort of free market in Europe—it is absolutely essential that we rid ourselves of a system of which we have rapidly become prisoners during the last few years. It is a hangover from the war years, and the years of Socialism, when the then Government believed that it was possible for some gentlemen in Whitehall, obscure and remote from the manufacturers, wholesalers and retailers, to have the power to decide what is a luxury, what is an amenity, and what is essential.
It is that discrimination to which I object so much, and though I shall support Clause 1—[HON. MEMBERS: "Oh"]—there need be no amazement about that. My right hon. Friend the Chancellor has reduced many of the Purchase Tax rates. He has moved from seven to four rates of tax and I commend him for doing so. As I said during the Second Reading debate, he has taken a short, faltering step in my direction. Next year, I want him to go the whole way and embrace a single 15 per cent. rate of tax. That may offend

certain hon. Gentlemen opposite, but after all, they are in the minority. I know that it will commend itself to the majority of hon. Members in this Committee, as well as to the overwhelming majority of manufacturers and wholesalers who, after all, are the persons responsible for the promotion of our trade, and the people afflicted by the highly discriminatory Purchase Tax that we have today.

Dr. Barnett Stross: It is always pleasant—at least, it is for me—to follow the hon. Member for Kidderminster (Mr. Nabarro). No one can doubt that whatever views he holds the hon. Member expresses them in a robust fashion. In this case, he has made it apparent that he has done a great deal of work to bring his right hon. Friend the Chancellor of the Exchequer to understand his point of view.
Obviously, in dealing with this subject we are dealing with the most powerful weapon available to a Chancellor, and the way in which this fiscal weapon is used can, to a great extent, decide the benefits or otherwise accruing to citizens in our country. I should have thought that if we are to move accurately and with forethought, we should have a philosophy behind our actions. The hon. Member for Kidderminster was quite brutal about the fact that he wanted a flat rate tax of 15 per cent. All his arguments showed that he was concerned rather with the amount of money which he would get in than with the question of social justice which might be involved. On that issue I find myself in disagreement with the hon. Gentleman.
May I give an illustration, which I know the Chancellor will agree with? The right hon. Gentleman has reduced Purchase Tax on jewellery and gold watches very considerably. Behind all this, undoubtedly great good will come in a philosophical direction, for a tax that persuades normal men to become dishonest is a bad tax. There is a tendency, I am advised, in this trade, for a lot of goods to be shown for sale as being second-hand which are not second-hand at at all. I am also advised that at a rate of 30 per cent. the inevitable tendency will be that in the whole of this trade the whole of the real tax will be recovered and that the sum total of it will be greater at 30 per cent. than at 90 per cent. That is what I am told.
If this be true, it is a good thing not to tempt people to be dishonest, to encourage people to honesty and, at the same time, to get a larger share of the revenue as a result.
4.30 p.m.
There is, however, a second point. A tax of this description should encourage good habits and penalise bad ones in the community. Of course, I do not agree with the tax itself. If we could do without it, we would all reject it, but we have to find some method of getting money. We need a lot of money. Therefore, I say that it is worth while looking at the good habits of our community and its less good habits. It is difficult to sit in judgment on these matters, but there may be a wide measure of agreement about certain fairly obvious things.
For example, last year the tax on the living theatre was removed. Most of us had been pressing for this for years, because we thought that patronage of the living theatre was a good habit and that we should not be without it. When we found it failing, year after year we pressed the Treasury. The Treasury agreed and there is now no longer any tax on the living theatre. Equally, the fine arts generally obviously should never be taxed, nor any method or means by which the fine arts are offered to people. Indeed, the Chancellor of the Exchequer finds £5 million net for direct patronage of the arts and a total of £6½ million for both direct and indirect patronage. He subsidises the fine arts, but he will find later in our debates, when we discuss the Schedules, that he also taxes the appreciation of them.

Mr. Simon: indicated dissent.

Dr. Stross: I do not want to discuss the question of gramophone records, or Beethoven's Fifth Symphony now, because that would be out of order, but later we will be able to discuss it. If I am wrong, I shall be delighted.
Let me, therefore, turn to our bad habits. Even in bad habits we tend to distinguish. Some of our bad habits are not all as bad as others. For example, it is said that smoking is bad for us and that as a result of it we are dying in increasing numbers from cancer of the lung. But inside the realm of that habit, it is believed that the smoking of cheroots, cigars or a pipe is not as dangerous as the smoking of cigarettes.

That is said to be the situation today. That being the case, why has the Chancellor not considered taxing pipe tobacco at a lower rate—although I know that this has no connection with the Purchase Tax—and cigarettes at a higher rate, in other words, to help citizens according to the best scientific knowledge available? If ever that proved to be wrong, we could revert back to the original position.
There is a historical analogy. There was a time in the eighteenth century when there was virtually no taxation on the material from which spirits—gin, in particular—were distilled. A habit had grown up as a result of which all sorts of crude and bad material was ignorantly distilled and sold as gin, sometimes laced and fortified with sulphuric acid and other substances of that type to make it a little more potent. In the public houses in London in those days, such concoctions were advertised in this way. As a result, serious damage was done to the health of the community. Eventually, the Government realised it. They taxed quite heavily the source from which the material was made, forbidding anything except pure corn itself as a source for the distillation of gin or so-called gin. Immediately, there were excellent results among the community as a whole. I offer that only as an illustration.
My last point to the Chancellor is that, of course, there must be discrimination. We must discriminate in favour of certain things in our lives—the home, for example. If ever there was anything of importance, it is the nest, or the home, and so far as is at all possible there should be no taxation on anything that goes into the building of a home or its furnishings.

Viscount Hinchingbrooke: Does the hon. Member include mink coats in the furnishings of a home?

Dr. Stross: I would not have thought that mink coats were normally included in the furnishings of a home. If they were mink curtains, I would call them a luxury, as are mink furnishings for the insides of motor cars. I should regard them as a luxury and not a necessity. I spoke of the home and the furnishings of a home. To my mind, everything that is included in the home, whether it is modern or old-fashioned, whether it is the latest electrical appliance to save labour or whether it is a simple table,


or the crockery that is made in my constituency, or the bed or the furnishings of a bed, or carpets, or anything else of that description—

Mr. Nabarro: Would the hon. Member not readily admit that all those labour-saving electrical appliances to which he referred, at present taxed at 30 per cent., should be taxed at the same rate as pottery—that is 15 per cent.—or carpets, which are 15 per cent., or furniture, which is 15 per cent.? If they are all essential for the home, surely they should all be on the same rate of tax and that rate should be equal to carpets at 15 per cent.

Dr. Stross: I was pleading for something a little more radical than the hon. Member for Kidderminster has now put to me. I was pleading that there should be no tax at all on anything that is included inside the home. That being the case, there was hardly any need for that intervention. If, however, I could not get those items tax-free, I agree that I would accept them at 15 per cent.
So far as business is concerned, I know that the Chancellor will agree that violent changes should be avoided. We have had some examples of violent changes. In speaking of business, one cannot deal with any enterprise without considering everyone concerned in it—the worker, management, owners, everybody. We had a distressing example in North Staffordshire when a 30 per cent. tax was imposed on pottery a few years ago and all our warnings were disregarded. It is fair to say—I say it modestly—that that which we said would happen did happen, as a result of which the Treasury was persuaded to make a change and to reduce the tax. Harm was, however, done and from that harm there has not been full recovery. I urge the right hon. Gentleman, therefore, to accept that it is worth working out a true philosophy for this tax. It can be levied so as to do as little harm as possible. Carelessly applied, it can do very great harm.

Mr. John Hall: I had not intended to intervene in Committee on this Clause but I am rather stung to my feet by my hon. Friend the Member for Kidderminster (Mr. Nabarro) with his suggestion that there should be a flat rate of Purchase Tax of 15 per cent. covering

all goods. It would mean that a number of goods now bearing the lower rate of 5 per cent. would have to bear an increased rate. He suggested that my right hon. Friend the Chancellor had taken a faltering step in his direction. So far as I can make out, he wants the Chancellor in future to fall flat on his face. I cannot see that the suggestion he advanced would be likely to benefit us in the long run.
One of the suggestions put forward by my hon. Friend would put us at a disadvantage in competing abroad. May I remind my hon. Friend that as and when we enter the Free Trade Area the furniture industry of this country will meet a great deal of competition from European countries, Scandinavia in particular, and that it will have to have every possible help that can be given to it to compete. It seems a curious way of helping the industry to raise the Purchase Tax on furniture from 5 per cent. to 15 per cent.
In recent months, certainly in the last twelve months, many furniture firms in constituencies other than my own—I am not speaking only of my constituency—have been going through a very difficult time. Recently, there has been a slight falling off, even in my constituency where the industry has become a little more sensitive to changes in the economic situation. In London, the largest centre of the trade, workers have been on short time. To increase the Purchase Tax from 5 per cent. to 15 per cent. on articles which are necessities, and from which the tax ought to be removed altogether, would be a retrograde step.
If my hon. Friend thinks that by averaging Purchase Tax at a general level of 15 per cent. there would be an increase in the total consumption of goods, and that that would make up the difference between the figures he calculated as the yield for the coming year and the reduced yield, he is mistaken. The greater part of the increased consumption has to come from those goods which at present are bearing the lower rate of 5 per cent. It would be more likely that consumption would be cut down on those than raised.
I wished to make that small intervention to show that as far as I am concerned I would oppose completely the suggestion made by my hon. Friend.

Mr. Victor Collins: I entirely agree with the hon. Member for Wycombe (Mr. John Hall) in what he has said. I also say that this is not a matter which has a purely constituency interest, although I have never thought it a bad thing for an hon. Member to talk about something of which he had knowledge, particularly if it happened to come from his constituency.
The hon. Member for Kidderminster (Mr. Nabarro), who has obviously given a great deal of study to this subject, put his case with his customary reticence and pleaded for what he was reluctantly compelled to admit would be one, uniform, non-discriminatory tax on certain classes of consumer goods. When challenged, he was good enough to work out what a 15 per cent. flat rate of tax would produce. I recollect that when dealing with the same topic the Chancellor put the percentage at about 20 per cent. to produce the same revenue. In my view, if such a policy were adopted it would mean over-production in many industries which are—

Mr. Nabarro: I wish to correct the hon. Member at once. I know that my right hon. Friend would concur that the Chancellor's 20 per cent. was related to a retail sales tax and that my 15 per cent. is based on Purchase Tax levied at the point of wholesale value.

Mr. Collins: I am much obliged to the hon. Member. I indicated that I was speaking from recollection and the figure in my mind was 20 per cent.

Mr. Chapman: The hon. Member for Kidderminster is misleading my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins). The sentence in the speech of the Chancellor referred to a tax on wholesale value, which, he said, would need to be 20 per cent. to yield the present-day level of total taxation.

4.45 p.m.

Mr. Collins: I am always a little reticent about these things, but that indicates that my recollection was very much better than that of the hon. Member for Kidderminster.
The figure given by the Chancellor no doubt was based on the most reliable information, the best available to him I should think, would be more reliable than

that of the hon. Member for Kidderminster. The right hon. Gentleman put it at 20 per cent. If the tax on goods now taxed at 60 per cent. of 30 per cent. were reduced to that level it would mean a very big increase in demand and perhaps over-production in many industries which are already doing well in the export market. That might have the result of reducing the exports which we so badly need.
It would also have the effect of actually crippling a number of industries of considerable value if the tax were put up from nil or 5 per cent. to 15 per cent. or 20 per cent. What is most important at present is that it must undoubtedly have the effect of increasing the cost of living, and cause major disruption in wage demands and in every other way. We have to bear in mind that, although Purchase Tax is an important part of any Budget, it is only one section of our finances and that it must be taken in relation to the whole.
I am most unhappy about one point referring to the collection of tax at retail level. In certain industries undoubtedly the public pay far more in tax than the Chancellor collects. That is a defect of our present system of levying the tax on wholesale value. In the furniture industry in which I am interested, there is not much retail price maintenance of fixed prices and it is unfortunately the case that Purchase Tax is added to the price and the profit is added to that. If the mark-up is 40 per cent., 45 per cent., or 50 per cent., when the Chancellor collects 1s. in the £ wholesale value, the customer pays 1s. 6d. in the £. In other words, it is "stuck on." That occurs in a number of industries. As I have already pointed out to the Chancellor in correspondence, this is a matter which needs looking into. It is a defect of the present system.
In the case of motor cars the actual amount of Purchase Tax is known. It is levied on the wholesale value. The customer knows when the car is bought how much tax is being paid, but unfortunately, that is not the case in other industries. That would have been an argument in favour of collecting tax at the retail end, although I appreciate that it would mean far more collecting points and probably far greater cost than at present.
On Second Reading, the Chancellor said that Purchase Tax is a means of raising revenue, not a means for discriminating against particular industries. I heartily agree that that is what it should be. I hope he will bear that in mind continuously in the debates we are to have over the next three days. If he will only bear that in mind and act accordingly, I am sure that we on this side of the Committee will find a lot of points of agreement with him.
As this is a general discussion on Purchase Tax, I should like to put forward from my experience principles which I regard as of some importance and with which I hope the Chancellor will agree. They are not necessarily put in order of importance, but as they occur to me. The class and types of goods liable to tax and the appropriate rates should be clearly stated in a form readily comprehensible to all, whether one has to pay or to collect the tax. In debates in Committee last year I advocated that we should drop the present form of setting out liability to tax in the method which I called the "exclusion method". I suggested that we should build up empirically again.
I must confess, having discussed this with the right hon. Gentleman, that I feel it would cause too great a disruption for too little benefit to adopt the method I suggested. We have had this system for so long and, difficult as it is with nearly 100 pages, it would cause too much trouble to do it the other way round. However, we should be able to go very much further and I welcome the steps the right hon. Gentleman has taken in the simplification of Notice No. 78.
Secondly, I think that the tax ought to be in a form which commands respect by the general public and does not bring this Committee and the law into contempt. In this connection, there should not be different rates of tax for similar articles because they are made from different materials, without substantial reason for different rates. I have taken up this point in correspondence with the right hon. Gentleman and he has been good enough to point out, for example, the situation if we had the same rate of tax on all watches, whether made of gold and other precious metals or of common metals.
With respect, I think that that is a non-starter, because without stretching it

too much we could regard gold as a different material from steel or iron. I suggest that the Chancellor should give much more consideration to this point. I welcome what he has done with respect to metal in furniture by bringing it into line with wood furniture for taxation purposes. He should give more consideration to the principle of having an article made from different materials—but otherwise the same article—at the same rate of tax. Unless he does, there are the most ridiculous anomalies.
Thirdly, in my view essential consumer goods in constant use by the whole community should either be exempt from tax or should be subject to tax only at the lowest rate. I do not agree with the hon. Member for Kidderminster that essential goods, which are in daily use in the home or outside, including clothing, should be taxed. They should be free of tax or, if they must be taxed for revenue purposes, it should be at the very lowest rate.
In his argument against a sales tax the Chancellor made a particular point about the taxation of food. I agree with his argument, but if he raises the bogey of possible taxation of food surely the same argument applies equally to taxation of pots and pans and the machinery of everyday domestic commerce. The argument is exactly the same, and if he finds repugnance in suggesting a tax on food it ought to be equally repugnant to him to have a tax on articles in every-day common use.
A fourth consideration, although lesser, which should be given to this subject is that special consideration should be given to those products which provide the main sources of employment for, or are mainly made by, blind and disabled workers. This may be a point of sympathy, but it well deserves the consideration of the Chancellor and the Committee.
Lastly, every effort should be made to avoid unnecessary disruption of industry and unnecessary work to industry in administering the tax. In some respects, the Chancellor has moved substantially in that direction, but in other respects he has failed signally, and I want to draw attention to the first point mentioned by the Financial Secretary when he opened the debate this afternoon. I am sorry to note that the Financial Secretary is to some extent indisposed, and I


hope that his indisposition is only temporary and not painful. He said this afternoon that the Second Schedule merely sets out the position and will eventually be incorporated in the revised version of Notice No. 78, but I was very disappointed to hear him say that it was not possible to produce the new notice before 1st October.
My complaint is that whereas the tax changes were operative immediately and persons and firms were obliged to collect the tax at the new rates from 16th April, the revised notice on which they have to rely will not, or, at any rate, need not, be available until 1st October. That is disgraceful. It is an example of the Government's attitude, and particularly the Treasury's attitude, towards manufacturers.
Right hon. Gentlemen opposite are constantly paying lip-service to the efforts of primary producers and manufacturers. They readily agree that this country would be nothing without the efforts of the men in the factories who provide the wherewithal for the social services and all the machinery of government. I am thinking of the manufacturers without whose efforts the whole army of professional men, including parsons, politicians and civil servants, would be on the bread line. Ministers, some of whom have never had a day's experience of industry, constantly lecture industry about efficiency and the need for more markets, but when they have a chance to help in a matter of this kind they immediately fall down on the job.
As the Chancellor said, Purchase Tax is a means of raising revenue, but surely he should see that it is raised with the minimum of inconvenience. The unpaid army of tax collectors should be bluntly told what they have to collect. He should see that they are not constantly subject to doubt and disturbance, frustration and annoyance.
Subsection (2) of the Clause is typical. The manufacturer is bluntly told, "You collect the tax now and you will get the guide book in six months' time. If you go wrong, you will pay." That is not the way to go on, but that is the position under the Clause.
The Financial Secretary looks on this complicated notice of nearly 100 pages, all packed tight—Notice No. 78—as the favourite bedside reading of the hon.
Member for Kidderminster, but, as I told him the other day, to many business men, and they are the people who have to keep the country going, it is a nightmare.
I mention to the Chancellor, in case he is not aware of it, that no Notice No. 78 was published in 1957—none at all. We had to go on with odd slips of paper of the Amendments. We had to look first at the 1956 Notice and then at the Amendments—and there were a number of changes that year. In fact, until two or three weeks ago the Notice published in January, 1956, was the only one available in the Vote Office. Of course, it does not matter much if we on these benches are given extra trouble like that, but it matters when men struggling to run and to expand a business, and their staff, have to spend hours and days unravelling mysteries which ought not to exist.
I am president of a trade association and I am continually receiving inquiries about Purchase Tax throughout the year. I make no complaint about that. After Budget day and continually up to now I have been inundated with telephone calls and letters, despite circulars of general guidance which I have sent out. I am sorry to say that a circular sent out on the day after the Budget contained an error. This is the first time in my recollection. The error arose on a completely unfathomable obscurity in Notice No. 78 N. One of my staff pointed out this obscurity to the Customs and Excise. The point was not made clear so that nobody could possibly misunderstand. The officer said, "You must spare a thought for the person or persons who drafted the notice." Perhaps so, but surely the proper attitude should be, "Spare a thought for the people who have to interpret the notice and put it into practice."
Perhaps the Chancellor might frame a notice of that kind and stick it on the wall in the office, instructing them that they should spare a thought for the people who have to carry out these things, the people whose main job is to produce and sell goods and not to spend anxious hours every day ferretting out which is the right rate of tax. The right hon. Gentleman is a former manufacturer and employer, and a very good


one, and I hope that he will bear this point in mind because it is of some importance that consideration should be given to the people who have to do this job. It is his duty to ensure that the changes which he makes are clearly understood and can be implemented with the minimum of inconvenience.
5.0 p.m.
I assure him that it is not only traders who are in doubt and difficulty; his own officers are in trouble, too. Only last Friday I had a letter from the Sheffield Borough Council department which deals with the blind, enclosing a letter from the local officer of Customs and Excise which said:
I am directed to inform you that the Commissioners regard fishing baskets as specialist sports requisites and chargeable to Purchase Tax at 30 per cent. under Group 10 (a) of the Schedule.
As the hon. Member for Kidderminster knows, Group 10 (a) deals with wallpaper. So the Chancellor has even got his own officers climbing up the wall, and it is not the only example that I could mention. A fishing basket is something in which the angler carries his food, mainly bottled; his bait, mainly canned; and such other accessories as he requires; and when he is angling he sits on it. It is a personal article under Group 23, and the tax is 15 per cent.
Why should I have to keep sending out scores of letters explaining these things simply because the Chancellor has not made plain enough to traders and, apparently, his own officers, exactly what he means? How does the right hon. Gentleman expect ordinary businessmen to know? It is foolish and wrong to ask industry to wait until 1st October for a new explanatory leaflet. By that time we might have had another Budget, and then we shall be off again. Anyone who tried to run a business on those lines would not last long, and it is certainly not the way to run a country.
It would be reasonable for the Chancellor to wait until Wednesday night, by which time I hope we shall have been able to incorporate many improvements. I urge him to consider, after Wednesday night, putting a new Notice 78 into operation immediately so that businessmen will have a guidebook which will enable them to avoid making mistakes and help them to carry out their task of

collecting the tax with far less annoyance, frustration and work than is the case now.

Mr. Burden: I find that in these Purchase Tax debates—I have taken part in a number—there is a good deal of common ground between both sides. I find myself in agreement with a considerable amount of what has been said by the hon. Members for Stoke-on-Trent, Central (Dr. Stross) and Shoreditch and Finsbury (Mr. Collins). However, I thought the hon. Member for Shoreditch and Finsbury was rather labouring the point about the difficulties imposed upon traders. I have always found—I, too, have to deal with this tax—that the Purchase Tax officers are most helpful on all occasions, and if they do not have the know-how, they quickly get it from the Purchase Tax Commissioners.

Mr. Collins: I am sorry that I did not say that. Every Customs official with whom I have come in contact has always been extremely helpful. These officers are overworked and underpaid. However, the difficulties exist, and it is no use pretending that they do not.

Mr. Burden: I agree with the hon. Member. I also agreed with him when he drew a distinction between Purchase Tax payable on foodstuffs and Purchase Tax payable on the pots and pans in which they are cooked and said that it was repugnant. I consider the whole tax fundamentally repugnant because it artificially inflates the cost of goods to the public.
Equally, I feel that my right hon. Friend is to be very strongly commended for the action he took in the Budget, for he has simplified the tax and reduced its ranges and rates. The Chancellor has generally shown by his example this year that he, too, views the tax—while it is a very good revenue-raiser and necessary from that point of view at the moment—with aloofness, if not repugnance, and would like to see it reduced as much as possible.
There are some things on which I do not go all the way with right hon. and hon. Gentlemen opposite. For instance, there was the play which was made on the question of social justice in Purchase Tax. It is very difficult to assess where there is social justice, whether an article should be taken out of Purchase Tax and whether another article should be


made subject to it. It is very difficult to know whether it is social justice so to tax the article of a certain industry that many of the workers, who are also entitled to social justice, are thrown out of work.
I was rather surprised that the right hon. Member for Battersea, North (Mr. Jay) took this line so very strongly. During Second Reading I quoted a very eminent authority when I said that this was a very difficult problem to assess. The eminent authority was none other than the present Leader of the Opposition, who said in his Budget Speech in 1951:
I must confess that, having studied the Schedules pretty carefully, I have come to the conclusion that there is no clear-cut distinction between articles which may properly be taxed and those which should not".—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 860.]
I should like to know whether that is still the policy of the Labour Party. It was at least the attitude of the present Leader of the Opposition when he was Chancellor. I was all the more surprised that the right hon. Member for Battersea, North should take the view that he did because at the time in question he was the Financial Secretary for the party opposite and also partly responsible for the Budget.

Mr. H. Wilson: My right hon. Friend the Member for Battersea, North (Mr. Jay) was the Financial Secretary, but not to "the party opposite". While I am on this point, is not the hon. Member aware that when my right hon. Friend the Leader of the Opposition used those words in 1951 he went on to take out of the field of Purchase Tax a very wide range of essentials, many of which were put back into the tax schedule by the Lord Privy Seal in 1955 just after winning the "prosperity" Election—and those items are still subject to Purchase Tax?

Mr. Burden: I am very glad that the right hon. Gentleman has raised that point. The concessions which the Leader of the Opposition made at that time amounted to a total of £2½ million. He removed from Purchase Tax such articles as pastry boards, pins and needles, but in the same Budget he increased the Purchase Tax on cars, wireless sets, television and gas and electrically operated domestic appliances—the latter all

articles on which right hon. and hon. Gentlemen opposite have today been claiming that the tax should be taken off—from 33⅓ per cent. to 66⅔ per cent.

Mr. Wilson: The hon. Member should recognise that that Budget, which caused considerable argument at the time, was rendered necessary by the financing of the rearmament programme when we were at war in Korea and that the first element in any rearmament programme must be to release steel and engineering products, articles which need no longer be released now.

Mr. Burden: In the same Budget the Labour Government increased the price of school meals by 1d. and raised the standard rate of Income Tax by 6d. The right hon. Gentleman cannot have it both ways.

Mr. Victor Yates: On a point of order, Mr. MacPherson. Is it in order for this subject to be discussed on Clause 1?

The Temporary Chairman (Mr. Malcolm MacPherson): I had been hoping that these comments would soon come to an end and that hon. Members would concentrate on the main subject for discussion.

Mr. Burden: If the hon. Member for Ladywood (Mr. V. Yates) had been present, he would have heard his right hon. Friend raising precisely these points when he opened the debate. I am merely replying to them.

Mr. Yates: I have not been absent from the Committee. I have heard every speech that has been made.

The Temporary Chairman: This also seems to be a matter which is not strictly relevant to the subject which we are discussing.

Mr. Burden: The right hon. Gentleman the Member for Battersea, North said that he would object very strongly to a general sales tax and he quoted the Paymaster-General as saying that it was the policy of the Government in imposing Purchase Tax changes to accept that there were three classes of goods—luxuries, amenities and necessities. That is a very good general rule. However, the right hon. Gentleman went on to say that while he believed that there should be a differentiation between


rates of Purchase Tax, he would like to see two rates of Purchase Tax. That is very important and we are entitled to ask the party opposite exactly what is meant by that. I wrote it down very carefully at the time and my hon. Friend the Member for Kidderminster (Mr. Nabarro) said at the time that the right hon. Gentleman was going his way and was more than half way there. What are the two rates of Purchase Tax which the party opposite would like to see?

Mr. John Edwards: My right hon. Friend did not say that he would like to see two rates. He was discussing simplification and he said that that might take the form of two rates plus zero. The hon. Gentleman takes my right hon. Friend's words beyond what they implied.

Mr. Burden: I am sure that the OFFICIAL REPORT will contain a very accurate report of what was said and if I have taken the right hon. Gentleman's words too far, I sincerely apologise, because the last thing I want to do is to be unfair. Nevertheless, there was a suggestion that there might be only two rates. There was no question of time and we are entitled to ask what it is suggested that those two rates of tax should be.
There was another topic where the right hon. Gentleman nearly put his foot in it, but then shied off. In view of the annoyance of housewives with his comment about Whitehall knowing best, that was understandable. He said that cosmetics should be regarded as a luxury, but then he shied off. I would say that a great many women throughout the country would consider cosmetics not a luxury, but a very desirable ancillary aid to beauty.
My main point, which I do not want to labour, is the need to realise, in simplification of Purchase Tax rates, that any violent fluctuation, up or down, or anything liable to upset trade at this time, is very bad. It has already been stated by industry generally that whenever possible tax changes should be made when stocks are at their lowest, and January is obviously the best time. I made that point very strongly during the Second Reading debate and I reinforce the arguments I used then.
If the changes are made when new stocks are coming into the stores, there is a hold-off in taking delivery and considerable disruption can be brought about, and even the reductions in Purchase Tax which we all desire can create unemployment in many industries because of the apprehension which can be created when it is thought that rates may be reduced.
That is even more the position today than it was when there was a sellers' market and when stocks of consumer goods were always short. That is not now the case. That is accepted, as I pointed out to my right hon. Friend, in Notice 78, which was issued in April by the Commissioners of Customs and Excise. There it is said that goods previously sent out on sale or return or similar terms are liable to the new rates of tax, unless they have been resold or unless the transaction has been adopted by the retailer before 16th April. That accepts that there is concern about the matter in the Department of Customs and Excise and in effect it provides a loophole for evasion of Purchase Tax—at any rate up to a point—because it says that the goods which have been bought on sale or return bear the new rate of tax.
5.15 p.m.
In some trades there is an agreement under which retailers pay the value of the goods on delivery without Purchase Tax, before a Budget has been introduced, and afterwards pay another cheque to make up for the amount of Purchase Tax at the old rate, or at any new rate which may have been introduced. That is not a very good arrangement since it applies only to some industries and to some firms. If it is legal, that should be made perfectly clear to all industries so that this apprehension about the changes can be cushioned by that means.
In principle, however, this is a bad thing and while I hope that the Chancellor will make it clear whether it is legal, if it is legal I hope that his Department will assist in framing the right sort of contract. I hope that the Department will draw up a model contract to ensure the legality of the arrangement. At the same time, that strongly underlines the argument that Purchase Tax


changes should not be violent and that Purchase Tax should be used for revenue raising rather than as a medium of economic policy and that wherever possible the changes should be introduced when stocks are lowest, so that the impact on trade is not as disastrous as might otherwise be the case.
Generally speaking, I fully support the Chancellor in all the changes and in his approach to Purchase Tax. I would not go as far as my hon. Friend the Member for Kidderminster in saying that one rate of tax should be introduced, since that would raise to a higher rate Purchase Tax on necessities. Nevertheless, with the Government's policy of cutting expenditure and if there is a possibility of reducing expenditure by a reduction in armaments, I hope that my right hon. Friend will be able to have one rate only and that should be at the lowest rate of 5 per cent. on goods presently bearing tax.

Mr. Chapman: I was glad to hear the hon. Member for Gillingham (Mr. Burden) say that he disagreed with his hon. Friend the Member for Kidderminster (Mr. Nabarro). It is on the sales tax argument that I want to speak this afternoon. We are having a very interesting argument, but it boils down to the fact that we are having the tail-end of the pressure, which grew just before the Budget, for transforming Purchase Tax into something like a sales tax. The hon. Member for Kidderminster took part in this wave of feeling about sales tax which we all witnessed before the Budget.

Mr. Nabarro: I started it.

Mr. Chapman: The hon. Member did not start it, but he helped it along its way and I am willing to give him that much credit. We all remember what it was. At that time it was thought—and I am sure that the hon. Member hoped that everybody would feel it was like this—that we could somehow substitute a sales tax of 1, 2 or 3 per cent. for the present rates of Purchase Tax, that we would all feel it very much less than we feel Purchase Tax today, and that everybody would feel that all there was to do was to have a level rate substituted for the present system. That is what the main pressure was for before the Budget.

Mr. Nabarro: Quite wrong.

Mr. Chapman: No, I am not wrong. I have as much evidence as the hon. Gentleman has. That was the main campaign that was carried on before the Chancellor opened his Budget speech. It is because the right hon. Gentleman had been attracted to those sorts of arguments—I see him nodding his head—that he made his remarks on 15th April, when he said:
I want to say a few words about a larger issue of which we have heard a good deal in recent months, namely, the possibility of substituting for the Purchase Tax a general sales or turnover tax imposed at a low rate over a much wider range of expenditure."—[OFFICIAL REPORT, 15th April, 1958; Vol. 586, c. 70.]
That is where the main pressure was before the Budget.

Mr. Nabarro: Will the hon. Gentleman give way?

Mr. Chapman: No, I will not give way now. The hon. Gentleman gave way to me once and he can have a go later on. In the meantime I want to get on with my speech.
After we had had this early pressure the right hon. Gentleman demolished the case which had been propagated by people who thought mainly like the hon. Member for Kidderminster. The right hon. Gentleman said. "We have in this country about £14,000 million in consumer expenditure; in that £14,000 million we have £3,800 million on rents and services of various kinds"—the chimney sweep which he mentioned—"and we cannot imagine ourselves taxing that at some new low rate." Secondly he said, "We have £4,500 million spent on food and nobody really expects that we are going into the sales tax on food."

Mr. Hale: That is exactly what the present Government have done. All over the world food prices are falling, and in this country alone prices have been deliberately increased by the Chancellor of the Exchequer as an economic weapon. There is a sales tax on food.

Mr. Chapman: My hon. Friend is quite right. We are talking about taxation in a more literal sense.
I was saying that the right hon. Gentleman split up the £14,000 million of consumer expenditure and said that something like £8,000 million was on items which we would not envisage taxing by means of some new sales tax. We were


left then with £4,500 million of expenditure on goods which had been taxed and about £1,000 million on goods which had been deliberately exempted. He said "What is the prospect of some 1 per cent., 2 per cent., or 3 per cent. sales tax?"

Mr. Nabarro: He did not say that.

Mr. Chapman: The prospect of some new low rate of sales tax, he said, was nil. Taking those last two groups together, including the items which have been deliberately exempted over the years, he said that we would still need a 20 per cent. Purchase Tax to bring in today's revenue. What really happened was that this early pressure for some low sales tax evaporated and we were left with a variant on what the Chancellor set out.
What the hon. Member for Kidderminster is embracing today is something which his right hon. Friend set out in the Budget, namely, something in the order of a 20 per cent. Purchase Tax on the goods that were then taxed. We have largely blown away most of the announcements on this issue, thanks to the right hon. Gentleman, but his hon. Friend is left with this tail-end of the sales tax argument. What he is saying is, "We will abandon all this talk about a small sales tax and we will have a 20 per cent. or 15 per cent. tax broadly on the goods which we tax at this moment." He says, "What is the justification for such a tax?" I have never heard such nonsense in all my life.
This is what the hon. Member for Kidderminster said in the Second Reading debate of the Finance Bill:
I do not believe that women's cosmetics, or motor cars, or television sets or radio sets, taxed at 60 per cent., are luxuries, any more than a carpet, taxed at 15 per cent.…

Mr. Nabarro: Go on.

Mr. Chapman: —or the other one about which I agree—the question of the motor chassis.

Mr. Nabarro: Will the hon. Gentleman permit me to intervene now? He should not quote just a section of my speech out of its context. These articles which I mentioned were very carefully selected. I went on to say:
…or a commercial motor chassis, taxed at 30 per cent., is a luxury.

That is the single item of industrial capital equipment which is subject to Purchase Tax. If the hon. Gentleman purports to represent motor car workers in his constituency, he ought to be the first to get on to his hind legs and support what I am trying to do.

Mr. Chapman: The hon. Gentleman will not frighten me with his talk about motor cars. I shall answer him when we reach the debate about motor cars. I shall have a good deal to say about his performance on that issue, which is totally irresponsible, and he knows it. If he wants me to go on quoting, I will quote what he said in the next sentence:
Nobody, in the House, when confronted with a series of articles of that kind, could define which one was more essential than another, which was a luxury and which was not."—[OFFICIAL REPORT, 12th May, 1958; Vol. 588, c. 98.]

Mr. Nabarro: Hear, hear.

Mr. Chapman: This is why I interrupted the hon. Gentleman before. The hon. Gentleman says that when we in Parliament come to tax a commodity or to decide principles of taxation, we are unable to decide broadly what is an essential and what is a luxury. What a farago of nonsense. That is why I interrupted him and said that that meant that we might as well tax food as much as alcohol and tobacco. If the hon. Gentleman wants to argue that we cannot distinguish essentials from non-essentials, he must admit that he is saying that everything that everybody wants is an essential and that, therefore, we must not tax it any more than we tax anything else. In other words, if I like beer or whisky it should not be taxed any more than food should be taxed. That is the hon. Gentleman's argument. It only has to be expressed in such terms to expose what nonsense it is.
It is the job of Parliament and of Ministers to make these difficult decisions and differentiations. The hon. Member for Gillingham quoted some remarks of my hon. Friend the Leader of the Opposition when he said that these matters are very difficult. He said that it is not always easy to make up one's mind what is an essential and what is not. Of course, it is not easy, but Parliament is here to do that difficult job, if we want a progressive system of taxation, of distinguishing between what is broadly an essential and what is less of an essential, and what


is broadly a luxury and what is less of a luxury. What is wrong with the argument of the hon. Member for Kidderminster is that he is trying to demolish the total case for a progressive system of taxation—[Interruption.] I know the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) does not believe in progressive taxation, but I did not think that he had taken the hon. Member for Kidderminster along with him on that view.

Mr. Burden: What worries me is that some people think one thing one year and another thing the next. For instance, today hon. Members opposite have been stating that all domestic electrical appliances should be treated as necessities. In 1951 the present Leader of the Opposition decided that Purchase Tax on such appliances should be raised from 33⅓ per cent. to 66⅔ per cent.

Mr. Chapman: I am coming to that point. Having demolished the argument of the hon. Gentleman that one can never decide what are essentials—and we do that every day of our lives in framing indirect taxes—when we come to the question of Purchase Tax at differential rates there are several principles which we have to guide us. In the first place, we have, broadly, to make value judgments about what is essential and what is a luxury. We have to do it not as something which is clear cut and easy but as something which is difficult and often hard to decide. Nevertheless, it is essential for those who believe in some progress in our system of taxation to decide these things.
5.30 p.m.
The second principle in determining our rates of tax is that we must bear in mind national needs, not only as regards what is essential but, to take the 1951 example quoted by the hon. Member for Gillingham, in terms of whether, at a particular time, because of some crisis in our economy or some difficult period through which we are passing, we must, unfortunately, use the Purchase Tax as a deliberate weapon to damp down consumption of certain kinds of goods or, as in the particular case mentioned, to free particular commodities or raw materials for a rearmament drive or whatever else may be needed. In other words, the second principle is based upon the day-to-day need of the economy in

the levels of consumption of commodities or raw materials.
In the third place, we must remember—and here I remind the Chancellor of what is wrong with the Purchase Tax—that beyond that point we become too rigid in our approach to the question. The hon. Member for Kidderminster tried to taunt me about the Purchase Tax on motor cars. I have always stated my view about the Purchase Tax on motor cars in this way. We cannot, in this country, afford a motor car industry which is largely geared to the home market; it must be primarily an exporting industry. If there has to be a Purchase Tax on motor cars, I am willing to see a high rate of Purchase Tax, much as I dislike it from a constituency point of view, because, first of all, I believe that the motor car is, relatively, a luxury. It cannot be said to be a luxury in black and white, clear-cut terms, but I believe that, in all the decisions we have to make, it is relatively a luxury, for a start. Secondly, I believe that we must keep the industry exporting at a high level and, if we freed it from Purchase Tax, a great many cars would come on the home market, to the disadvantage of our export trade.
Within that general situation which I have outlined, our approach must be flexible. For example, when the motor car industry fell on difficult times and the export trade pretty well dried up, or was drying up to a large extent, with consequent unemployment within the industry, that was a time to make some reduction in the Purchase Tax as a temporary measure. That is the third principle I bring into the discussion of Purchase Tax. Whatever rates we fix, we must be willing to move them as and when occasion demands and the industry concerned may be in difficulties. In this connection, we shall come to the taxation on bicycles a little later. This is a clear-cut case for the application of the principles I have been advancing.

Mr. Frederic Harris: All the hon. Gentleman's argument has been based upon the assertion that Parliament itself fixes these Purchase tax rates. On that basis, the argument would be very sound; but, of course, it is not so. It is the civil servants of the Treasury who fix these rates, as we all know.

Mr. Chapman: The hon. Member for Croydon, North-West (Mr. F. Harris) had better go away and read the Finance Bill. If he will turn his attention to the First Schedule and the Second Schedule and be prepared to sit here for three days when we discuss those, he will both hear and be able to take part in Parliament's work in deciding these levels and rates of tax. His argument is nonsense. He has been through the Lobby on more than one occasion during his eight years of membership of the House, either to support or reject particular rates of Purchase Tax. It is absolutely true that Parliament decides these things.

Mr. Hale: On a point of order, Sir Gordon. The hon. Member for Croydon, North-West (Mr. F. Harris) said that civil servants fix the rates of taxation. If that is so, the Chancellor having sat silent after listening to that statement and made no correction whatever, has the right hon. Gentleman any right to answer for Her Majesty's Government or to intervene in this discussion or, indeed, to represent that he has any responsibility either to the House or to the Crown?

The Deputy-Chairman (Sir Gordon Touche): That is not a point of order at all. The accuracy of the hon. Member's remark is not a matter for me.

Mr. Hale: I only said it with deep regret, Sir Gordon.

Mr. Chapman: I will not attempt to intervene in an argument between my hon. Friend the Member for Oldham, West (Mr. Hale) and the hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris), because every hon. Member of the Committee, except the hon. Member for Croydon, North-West, knows that what we are doing in the next few days is deciding upon particular rates of tax.
Primarily—[Interruption]—the hon. Member for Kidderminister (Mr. Nabarro) takes his arrogance a little too far sometimes. There are times when we should like to remind him of some of the courtesies of this Parliament. I would say to him, in measured language, that what he has been doing in the last few weeks and months is to try to tell us in Parliament that we should never, in making decisions about taxation, exercise any judgment about what are essentials and what are not essentials or about

whether we should tax one man's pounds or purchases as much as we should tax any other man's, no matter to what extent it may be luxury expenditure and no matter how many pounds different men may have.
Over the years, Parliament has established a tradition of progressive taxation, and we shall not let it go for the sake of the sort of farago of nonsense talked by the hon. Member for Kidderminster during the last few weeks. I am glad that the Chancellor has stood out against his hon. Friend and said that, if we are to have a Purchase Tax—which nobody likes, because nobody likes any tax—we should make it, broadly, as progressive as we can. So long as he does that, and so long as he stands on those grounds against his hon. Friend the Member for Kidderminster, he will have the support of hon. Members on this side of the Committee.

Mr. John Arbuthnot: There are two things upon which we are, I think, in complete agreement. The first is in our congratulations to my right hon. Friend on the way he has taken a substantial first step to clear up the general muddle of Purchase Tax, reducing the rates from seven to four. We look upon that as a forerunner of further steps in subsequent Budgets. The second thing upon which there has been general agreement is that individual changes in Purchase Tax are apt to create hardship and, therefore, the changes should be comparatively gradual, as they have been in this Finance Bill.
I wish to refer to one special item in Purchase Tax. I ran across it in the course of my business activities the other day. As the law stands today, there seems to be no provision for Purchase Tax being repaid in cases where it is inequitable that it should have been levied in the first place. A firm which is not registered for Purchase Tax purposes may order goods from some other country in order to send them to a third country. The goods come to this country, where they are assessed for Purchase Tax and the tax is payable upon them. If the goods are not opened in any way and no change is made in them, and they are sent on in exactly the same condition as that in which they come here, the Purchase Tax, nevertheless, cannot be reclaimed. It can be reclaimed only if the


goods go into bond. If the goods come by parcel post, there is no bond into which they can be put.
Without some provision for the repayment of Purchase Tax when goods come through this country on their way to a third country, there will be unfairness in the application of the Purchase Tax. I ask my right hon. Friend to look at the matter with a view to making some provision for remission to a firm which is able to prove a bona fide case.

Mr. V. Yates: I think that this interesting discussion has led us to consider what the alternative method of taxation should be rather than to express more forcibly our views about the existing method. I am, and always have been, much opposed to the principle of Purchase Tax. I think that it was first introduced for the purpose of discouraging people from consuming. The purpose of the tax was not to increase revenue, and now that we have such a valuable means of obtaining revenue it is difficult for us to dispense with it. While I do not agree with all the views of the hon. Member for Kidderminster (Mr. Nabarro) on an alternative method, which I think is equally discriminatory as the existing system, it is useful for us in Parliament to consider the suggestion.
My right hon. Friend the Member for Battersea, North (Mr. Jay) said that in considering Purchase Tax we have to distinguish between luxuries, amenities and necessities. I have considered this point carefully in the last few years. It is very difficult to say what is a luxury and what is not. As the Committee knows, I represent a constituency which is the main centre of the production of what many people would call a luxury, namely, jewellery. There is no doubt that in years gone by Birmingham has contributed much to the adornment of palaces and homes, not only here, but throughout the world. It may be said that this is a luxury trade, but for some years now I have been trying to persuade the House of Commons that what it regarded as luxuries were necessities.

Mr. Nabarro: The hon. Gentleman is making my case for me.

Mr. Yates: Then the hon. Gentleman will appreciate what I am saying. I venture to suggest that if he were to present his case to the Committee with a

little more courtesy he would get a great deal of support, or more support than he gets at the moment.
The Chancellor of the Exchequer has undoubtedly recognised that jewellery, for instance, is not now to be considered as a luxury. I very much welcome his decision to reduce the tax on jewellery from 60 to 30 per cent., and I am sure that it is a right move. The Chancellor will recollect that I found it necessary to call his attention to a considerable black market in this industry. I know that it is one thing to say that a gold ring is a luxury; but when we consider that gold rings are supplied second-hand by the gross and that they escape Purchase Tax, then it is impossible for a Government to be able to control that sort of traffic.
5.45 p.m.
There is a difference between the manufacture of small articles, like jewellery, and the production of motor cars. It is not so easy to produce a motor car by black market methods as it is to produce some other goods. Therefore, the criterion must be whether the Purchase Tax which is being imposed leads to great difficulties in an industry and affects its trade.
One of the difficulties is that the tax acts so late. Let us take the jewellery industry as an example. Many of its best-skilled artisans have gone. The Chancellor does not recognise that cosmetics should come into the low range of commodities, and a powder bowl, for instance, carried a 90 per cent. tax for a long time because it came under cosmetics. All the firms that manufacture powder bowls and similar goods have really lost their trade. It has gone to France and Germany. Even though a silver powder bowl may be regarded purely as a luxury, it does damage if our trade is affected so that we lose our exports and cannot compete with other countries. That is a principle that we have to consider.
I do not like Purchase Tax. I have been battling on the issue of jewellery, but in Birmingham the cycle industry also presents a great problem. If an industry suddenly falls on difficult times and cannot export and is faced with great competition and unemployment, something has to be done about it.
I should like to see, and I hope to see, the gradual reduction and eventually the elimination of Purchase Tax. I would much rather see it take a different form. I have never been keen on indirect taxation. I realise that the raising of £490 million in revenue is not an easy matter. For that reason I appreciate that a change in the system is not something that can be done quickly or in a revolutionary manner. Nevertheless, I am disturbed by the vast number of anomalies that are still in existence even though the Chancellor has reduced the number of rates.
We shall be debating later whether buttons should carry a tax of 30 per cent. or whether they should be reduced to 5 per cent. like hooks, eyes and zip fasteners. We make buttons for uniforms in Birmingham. Badges that officers wear will either be exempt from tax or the tax will be very low, but the buttons which go on the uniforms will be taxed at 30 per cent. Even though the tax has been reduced in some cases, this is the kind of discrimination that will still exist. If we reduce the rates, and if my hon. and right hon. Friends, when they get into office, as surely they will, reduce the rates still further, it will be very good.
Nevertheless, the Clause puts a principle which I cannot accept and have never accepted. I do not think it a good thing and I do not think that the alternative method proposed would be acceptable in the country. It does not allow room to manoeuvre. If we fix one rate of tax we cannot adapt the tax to meet the difficulties of an industry. Rather than have a uniform tax I should like to see the tax gradually reduced, and an alternative way found of raising the revenue if it be needed.
At the same time, I am glad to be able to say that my constituency appreciates the added incentive now given to it. I have been informed that black marketeers in jewellery have been making a profit of about 25 per cent., but now that the tax is reduced by 30 per cent. it allows them only 5 per cent. margin. [HON. MEMBERS: "Oh."] It still leaves the Chancellor with a little way yet to go, but nevertheless it has been of assistance. I hope that eventually we will be able to extend this incentive beyond the industries making so-called luxuries and I hope that, instead of dividing all things into luxuries and necessities, we shall

decide what is essential to the trade of our country, for if it is essential to the trade of our country it adds to the prosperity of the nation.

Mr. Frederick Mulley: I am very happy to follow my hon. Friend the Member for Birmingham, Ladywood (Mr. V. Yates) because I have followed him on previous occasions when we have debated Purchase Tax. It will be known to the Committee that he has been a steadfast campaigner on behalf of the Birmingham jewellery trade, and that he brings a good deal of knowledge of this matter to our debates.
My hon. Friend has touched on one of the great difficulties, the definition of what is a luxury. The production of what may be a luxury to the purchaser may be the only available means of livelihood to the craftsman. I was a little concerned when I saw the cross-bench alliance developing between my hon. Friend and the hon. Member for Kidderminster (Mr. Nabarro) and I would counsel my hon. Friend that if he pursues this liaison he should ensure that he will be the senior partner in the venture.
What I thought a startling revelation came in an intervention by the hon. Member for Croydon, North-West (Mr. F. Harris) when he suggested that we were rather wasting our time because all these matters were dealt with by civil servants, anyway. I remembered that it was said that the Lord Privy Seal did not know what was in a Schedule, or had the wrong brief. I see that the Chancellor has seen fit to leave the Chamber as I come to this question. I am sure that we can acquit him of not having any idea of what this is all about, but it ill-becomes hon. Gentlemen opposite, after implying that their own leaders do not know what is going on, to complain that the trouble with the Opposition is that the Opposition have no policy for Purchase Tax.
Several hon. Members opposite have asked what, in this situation, the Opposition would do about the rates of Purchase Tax. In a debate on a Finance Bill the Opposition are always in very great difficulty for the rules of order permit us to put down Amendments only for the reduction of taxation. It is impossible for the Opposition to reshape financial, economic and fiscal policy in the way we should like it to be. We do


not accept the Government's policy in toto, and it is not merely a question of rearranging the revenue and the finances.
No doubt my right hon. Friend will give the official Opposition view later, but, speaking for myself, I would say that I cannot possibly accept the assumption underlying the question of hon. Members opposite, "What would the Opposition do about Purchase Tax?" I do not accept that the policy of the Government is right. I think that in all the economic circumstances of the day a little more inflation or a little more reflation, call it what we will, a little more spending power, in view of the mounting unemployment, would be highly desirable.
I make that point only because I have no doubt that this question by hon. Gentlemen opposite will be a text on which they will make many speeches during our rather lengthy debates on this and other subjects. I would answer briefly by saying that we should not find ourselves in precisely the same situation as that in which the Government now are, and that, therefore, it is a rhetorical question to ask what the Opposition would do about Purchase Tax and whether we would have three rates of tax, and so on.
I agree with those who have said that Purchase Tax is a very unsatisfactory tax. It is not surprising, because all taxes are to some people, if not most, unsatisfactory. It is the unpleasant part of government to have to find the revenue wherewith to meet expenditure. The only argument for Purchase Tax is that it brings in £490 million a year. To my mind, that is the only justification for it.
It is almost inevitable a tax of this sort, reshape it how we will, will create anomalies. It is true that the worst anomalies may be smoothed out by careful combing of the Schedules, and so on, but with differing rates of Purchase Tax there are bound to be anomalies. With every Finance Bill containing them we shall have from one trade or another letters of the sort we have received today, telling us that eyebrow curlers are at 60 per cent. but that if one goes in for false eyebrows one can have them tax free. We are bound to get a list of these kinds of anomalies.

Dr. Stross: Was it not eyelashes—not eyebrows?

Mr. Mulley: My hon. Friend, with his almost encyclopaedic knowledge of these matters, is almost certainly right.
However, I am sure that we cannot get rid of the anomalies if we have Purchase Tax in this form, and we have to make up our minds about that.
The other extreme, however, put to the Committee by the hon. Member for Kidderminster, is quite absurd. It is quite impossible in indirect taxation to avoid discrimination. I ask anyone worried about the discrimination of Purchase Tax to consider for a moment discrimination against people who enjoy alcohol or tobacco. The smoker pays one and a half times the amount of total yield of Purchase Tax, about £750 million in tax, and the people who like several sorts of alcohol pay nearly as much, about £400 million. That is obviously a very strong discrimination between one citizen and another.
The question of food has been brought up. We on this side would not support any scheme which would bring food into the direct system of Purchase Tax, sales tax or any other kind of tax of the sort. Of course, one can easily argue that already there is discrimination against those who take most of their food from the bottle, as compared with the orthodox sort.
I do not think we can ever get away from the principle of discrimination. I believe most of my hon. Friends would agree that it is much better that the greater part of the revenue of the State should come from direct rather than from indirect taxation, but it would be wrong to suppose that it would be possible to finance a Budget of the present size wholly by direct means, and, therefore, we are bound to have some form of indirect taxation.

6.0 p.m.

Mr. Cyril Osborne: May I ask the hon. Gentleman—and this is a serious point that he must face—whether he would agree with the Economist that it is better to tax men's spending than their earnings, since what we want are earnings, and, therefore, greater productivity, and that, on balance, it is better to increase Purchase Tax than Income Tax, which may cause men to work less?

Mr. Mulley: I rarely find myself in agreement with the Economist these days and I could not subscribe to that proposition. The statement that taxation on earnings has a general disincentive effect is, I believe, often overstated, but I would go beyond the bounds of order if I developed the reasons for that point of view.
If we must have some form of indirect taxation, such as Purchase Tax, we are faced with the question: on what ground it should be based? I can illustrate the difficulties to some extent by giving two examples of classes of commodities which are made in my own constituency, Sheffield. I believe that as far as possible necessities should not be taxed and I have often cited in this Chamber cutlery as a necessity—knives, forks and spoons. I do not think it is possible to argue that even on a very low standard of living we could dispense with implements for eating, but since the imposition of Purchase Tax it has been impossible to buy cutlery without paying tax. I will not now argue that the tax should be removed, because I hope that we shall have an opportunity to do so in greater detail at a later stage.
On the other hand, we have in Sheffield the silverware industry, which many people could rightly say makes goods of a luxury character. At the same time, the workers in that industry depend on it for a livelihood and it is a highly skilled craft industry. In my view, as things are, even if Purchase Tax were removed the industry will die because no new entrants to the trade are forthcoming. At least, however, over the years we have been able to remove some of the greater anomalies.
For instance, formerly a knife with a bit of mother of pearl on it attracted a much higher rate of tax. At least that anomaly has been removed and I think that we can get some sort of rough justice as between the workers in an industry and the consumers of its product. So I ask every hon. Member, when he talks rather glibly about luxuries, to remember the circumstances, which differ from trade to trade—whether it is a highly skilled trade or a mass produced trade, and so on.
It seems to me that the only considerations which can really be applied in deciding which articles should be taxed at

what rate are the basic economic problems and considerations of the country as a whole. I differ strongly from the hon. Member for Kidderminster when he says that he does not think that tax should be used to stimulate exports. I believe that that is one of the main reasons why the tax should be used and can be justified, namely, if it can produce a deterrent on the home market which can be shown to have an advantage in the export field.
I only wish that the British motor car industry had carried on in the years of the Conservative Government the same percentage of its exports as when we were in power. The fiscal and economic position facing the Chancellor of the Exchequer today would be vastly different if they had done this.

Sir A. V. Harvey: Would the hon. Gentleman not agree that there are times when it is essential, to build an export trade, to have a good home market, that a high rate of Purchase Tax depresses the home market and that, in consequence, it adversely affects the export trade?

Mr. Burden: Would the hon. Gentleman not agree also that, during the period he mentioned, the countries which are now big importers of British motor cars had not recovered from the devastation created by the war and, therefore, were not in a position to buy these luxury articles?

Mr. Mulley: I will try to deal with both hon. Gentlemen one at a time. It is true that an industry needs a sizeable home market, but the requirements vary industry by industry. The remarkable exports achieved by the British motor car industry in the years roughly from 1948 to 1951 were done with a smallish home market. I venture to say that they would not have been done if British motor car manufacturers had not ben kicked into that export drive by my right hon. Friends who were then running the Labour Government.
As to the point made by the hon. Member for Gillingham (Mr. Burden), it is true that competition for motor cars at that time was much less than it is now. What I resent so much is that, having got this flying start, the British motor car industry, encouraged by the Conservative Government, switched their sales


over to the home market at the crucial time when they should have been facing the test of foreign competition.
I believe that the British motor car industry, among others, can stand up to this competition. Their representatives should not come here with excuses to the effect that if they paid less Purchase Tax they could sell more abroad. If they had concentrated on the producing side and on servicing, as Volkswagen have done, and ploughed their profits back into the industry, it would have been a very different story.

Mr. Osborne: The hon. Gentleman has said that when the Socialist Party was in power it kicked the motor car manufacturers into selling their cars abroad. May I ask two simple questions? First, who was it who did the kicking, and, secondly, if it gets back into power again does it intend to start kicking again?

Mr. Mulley: I am not likely to be in a position to answer the second question. I would like very much to be in a position to answer it, but it is rather unlikely that I shall.

Mr. H. Wilson: Would it help my hon. Friend in answering the interruption to boar in mind that when the late Stafford Cripps proposed, at the motor manufacturers' dinner, in 1946, that they should export 50 per cent. of their total production, he was howled down by the motor manufacturers, and Conservative spokesmen in the House supported them for howling him down? When I became President of the Board of Trade I went to the motor manufacturers and asked them to export 75 per cent. of their total production, which they did with great success, and their sheet steel allocations were based on their export performance.

Mr. Osborne: If I may say so, the right hon. Gentleman was much more successful in talking persuasively than his right hon. Friend was in kicking.

Mr. Mulley: The hon. Member for Louth (Mr. Osborne) will be giving us the benefit of his observations on these points in due course. I would not like him to suppose that in using the word "kicked" I was doing so literally; I was using it metaphorically. There is no doubt that at least as much of the credit for the exports achieved by the motor car industry goes to my right hon. Friend

the Member for Huyton (Mr. H. Wilson), who was then President of the Board of Trade, and the late Stafford Cripps, as it does to the motor industry. I would like very much to see today in the motor car industry some of the competitive spirit which was engendered in those days.
6.15 p.m.
I have got further away than I intended from the point I was making. The point is that I believe it is quite proper to use the Purchase Tax as a means of directing the economy in a broad sense. I believe that, as in 1951, when there was a great shortage of steel and other difficulties in engineering, when we were mounting an enormous rearmament drive, it was quite right that the Chancellor of the Exchequer of the day, the present Leader of the Opposition, thought fit to restrict consumption in a number of ways which reduced the demand on those industries. In the same way, where there is a large export potential, I think it is right to tax certain classes of electrical goods, television sets, and so on. The hard fact is that one always has to judge such matters by the revenue they will produce.
A matter that has not been stressed enough in this debate is that a good deal of thought should be given to the cost of collecting the Purchase Tax. Apart from the general considerations which I have tried to adduce, I should like to suggest that the Chancellor or the Financial Secretary, every time he looks at the Purchase Tax Schedule, should ask himself, "Does that particular item pay for its collection?" I am quite sure that if he went through the list very carefully on that basis, he might well be able to make some further reductions.
That is perhaps an old-fashioned, Gladstonian approach to public finance, but I think it is well worth consideration. I believe that a lot of the 5 per cent. items, for example, could very well be wiped off, and that, in terms of the net national revenue, there would be some saving there.
I make no bones about saying that we must retain Purchase Tax in some form or another, but that I believe that we have to consider it against the economic circumstances of the day, and not relate it particularly to the amount of revenue that must be raised.

Mr. F. Harris: I intervene only for a few months because I have been taken up on an interjection I made a short while ago. As one who has had the privilege of being a Member for ten years, I have listened to debate after debate, day after day and night after night, on individual problems in regard to Purchase Tax and in regard to individual rates of Purchase Tax. The hon. Member for Ladywood (Mr. V. Yates) has made his case every year on behalf of the jewellery trade, and we have all presented claims in regard to trades which we know something about or on behalf of constituency interests. If hon. Members opposite are fair with themselves, they will recognise that very few alterations have been made as a result of these representations. Alterations may be made when hon. Members get together and make an approach en masse to the Government of the day and constantly plug away with those representations.
I am not privileged to be a Minister, and therefore I can only judge the matter from a business point of view, but I take the view that, quite naturally, the civil servants in the Treasury put forward their recommendations—in fact, I blame them for many of the anomalies from which we all suffer these days—and the Chancellor or the Financial Secretary then decides whether or not to accept them. Certainly, the Government decide the policy; how much they are trying to obtain from Purchase Tax, or whether there will be a general range of reductions. I do not think there was anything to make hon. Members so sensitive in the interjection I made. The hon. Member for Northfield (Mr. Chapman) seemed to be particularly touchy on the subject.

Mr. Chapman: I was not touchy at all, but the hon. Gentleman said that it is not Parliament which fixes the rates of the tax. He said that the civil servants make the recommendation.

Mr. Harris: I think the hon. Gentleman rather suggested that I did not take any interest in this matter. As far as I know, I have never missed an all-night sitting. I have taken every opportunity to take part in these discussions.

Mr. Moyle: The hon. Gentleman seems to be very well informed about the relations between civil servants and the

Government. Could he tell us—what I should like to know particularly—which branch of the Civil Service is responsible for recommending to the Chancellor changes in the Purchase Tax Schedule? Is it the Treasury or the Board of Trade, or, if neither, which Department?

Mr. Harris: I should have thought the obvious answer was the Board of Customs and Excise, but I am not privileged to have any specific knowledge. I am only trying to put forward what I consider to be a reasonable business and commonsense view of the matter.
The hon. Member for Northfield makes the point that it is Parliament that decides this matter. We are all as democrats agreed that that is so, but after ten years' experience in the House I think it is a reasonable assumption that the hon. Member for Ladywood has not been particularly successful, whether in the time of the Socialist Government or the Conservative Government. No matter which political party has been in power, the hon. Member has made his case year after year during the past ten years but he still has not got very far with his arguments.

Hon. Members: No, no.

Mr. V. Yates: It is the final issue that counts, and we have been successful to a large extent this year. Is the hon. Gentleman not aware that either the Chancellor of the Exchequer or the Financial Secretary receives deputations from various trades every year? Is he asserting that the Chancellor is quite oblivious to these views and simply takes the view of civil servants, as distinct from those given to him by Members of Parliament or outside trade organisations?

Mr. Harris: The hon. Gentleman could not possibly read that into what I have said. I have said that Ministers are there to be approached and that recommendations and applications are made to them. I am only making the point that there is still too much heat engendered by the sensitiveness of Members of Parliament. There is no doubt about what I said; it was obviously the civil servants, and hon. Members know this to be the fact.

Hon. Members: No.

Mr. E. C. Redhead: If the hon. Gentleman makes the point in this connection that civil servants make recommendations, as it is


their duty to do, to Ministers, leaving the final decision to the Minister, will he say in what respect that differs from any other function of a civil servant in relation to his Minister?

Mr. Harris: The hon. Gentleman has helped me very much indeed. That is exactly what I have been trying to say, despite the excitement engendered by the hon. Member for Northfield, when I made what I think was a very truthful interjection, which hon. Members opposite do not like on occasions.
To pass from that topic, I join with all hon. Members who are against Purchase Tax generally. I am very much against it, because my own feeling has always been that it keeps up the cost of living. I have always felt, and I must be careful not to be ruled out of order, that by the Purchase Tax we add to the problems of the people and that the more we cut down Purchase Tax the better it is for the cost of living and for business generally. That is from the sheer business point of view.
I thought the hon. Member for Sheffield, Park (Mr. Mulley) was talking nonsense when he tried to make the point that Purchase Tax was not really bad for export business. My hon. Friend the Member for Macclesfield (Sir A. Harvey) intervened to suggest that surely nobody in business, as a matter of sheer commonsense, would say that we must not have a solid home market upon which to develop an export market.

Mr. Mulley: I do not disagree with the general proposition and what the hon. Gentleman tried to say. I tried to put a number of instances in which it was possible to foster exports by restricting demand at home. It is a simple proposition that if a manufacturer can sell the whole of his production on the home market he will not take the trouble or run the risks involved to enter the export business, and when the home market had gone it would be too late to go in for exports.

Mr. Harris: If that is the hon. Gentleman's understanding of the business community in this country, considering how much the people in the constituencies of hon. Gentlemen opposite owe to the success of our business community, I think the hon. Member's assumption is a very poor one.
I am only making the point that, although there are exceptions, my experience of business convinces me that business houses must have a solid home trade upon which to build and develop export markets. Hon. Members have made a scandalous attack on the motor trade as a whole. In the main, the motor trade has done a first-class job in exports, and is certainly proving that by its present performance—there cannot be much doubt about that. When that point came up, the hon. Member for Northfield kept very quiet.

Mr. Chapman: The hon. Member will remember that I was one of the foremost critics of the motor industry when it went through a period during which its export record was not good. I frequently took part in debates on the subject, and I strongly criticised those bad performances.

Mr. Harris: It is very easy for individual Members to criticise various industries and trades. It would be much more clever of them if they went into those trades and showed them how to do it. The general answer is that motor manufacturers have put up a first-class performance. They could not have been in that position if they had not had a reasonably healthy home market upon which to build. If the Chancellor overtaxes an industry with Purchase Tax rates which are too high, the task of manufacturers creating a position whereby the country can obtain the maximum export trade is jeopardised.
I am sorry that my interjection engendered so much heat. It was not made to cast reflections on the Chancellor, the Financial Secretary, or the Civil Service. I was merely stating what I believed to be the truth. Unfortunately, I am at the receiving end of many of these anomalies in Purchase Tax which cause so much trouble in business. Hon. Members must often have heard the view that the trouble is caused by civil servants who do not know anything about a business. That view may be wrong, but it is often expressed.
I should like to see a gradual reduction of Purchase Tax. I am completely against it, and the more it can be reduced the better I shall be suited. Purchase Tax has a deterrent effect on the development of an export trade, and the more it can be reduced the better it will be for the country.

Mrs. Jean Mann: Listening to the debate, I have sometimes wondered whether we were debating Clause 1 or the Second Reading of the Bill. I confess that I do not know the answers to whether we should impose taxes on luxuries, or whether we should regard the Budget from an economic standpoint. I do know that during the régime of the Labour Government, from 1945 to 1950, we strenuously tried to keep the tax to luxuries and gradually to remove it from necessities, until in our last Budget there were 60 items, including sewing thread and needles and bootlaces, which were removed from the scope of the tax.
The hon. Member for Gillingham (Mr. Burden) said that the tax on cosmetics was high and that he did not regard cosmetics as a luxury. He said that ladies regarded cosmetics as a necessity. I dispute that.

Mr. Burden: If all ladies were beautiful, I would say that it was a luxury, but cosmetics certainly improve the appearance of many women and to many it is a great necessity.

Mr. F. Harris: He is speaking from experience.

Mrs. Mann: There are times when it is necessary, but I cannot think that eyelashes, for instance, are necessary—[Laughter.]—I mean false eyelashes. One might just as well say that false moustaches are necessary.

Mr. Nabarro: Oh. no.

Mrs. Mann: When one looks at the hon. Member for Kidderminster (Mr. Nabarro) one would immediately decide that one was wrong. What about false nails? Surely they are not necessary. [An HON. MEMBER: "False teeth."] Rouge should not be necessary if one has the fine colouring of my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock). [An HON. MEMBER: "Eye shadow."] Eye shadow is not necessary for any woman who is living under a Tory Government. She has enough shadows under her eyes to last for the rest of her life. Many Tory ladies do not require eye shadow, considering the kind of husbands they have. It is very problematical whether cosmetics are a luxury or not.
The advertisements for cosmetics sometimes show expensive cosmetics which are said to contain lanolin. I can buy lanolin at 8d. for a small bottle. Another advertisement says that a cosmetic contains an astringent. Anyone can buy an astringent, pure witch hazel, at 11d. a bottle. The reduction with cosmetics should not be in Purchase Tax but should be made by the manufacturers who are taking advantage of a great many innocent women.
The changes which I should like to have seen continued in the Budget were those which were begun two years ago, the changes in the attitude of the Government towards home safety devices. The Home Secretary is responsible for home safety, and while the present Financial Secretary was at the Home Office, those of us in the Home Safety Group were delighted. We had never had such a sympathetic M.P. on the Government side as the Financial Secretary. We had never had one who spent the long hours with us trying to understand and grasp our problems, as he did understand our problems. We never had one who went to our conferences and who showed that he knew all about home safety.
Then, lo, he completely disappeared. Now he turns up as Financial Secretary, and I can only say, "Verily, verily, the Lord hath delivered thee into my hands." I asked the hon. and learned Gentleman about a device on a cooker, a device which won a £200 award of the B.B.C. Cookers are tax-free whether they are electric or gas. But one brilliant lad discovered how to prevent youngsters from pulling over pot handles. His device was patented by the Thames Gas Board, and a tax was immediately imposed upon the cooker, yet hospitals are constantly treating burns and scalds caused by youngsters pulling over the pot handles.
6.30 p.m.
This tax was imposed by the Chancellor's predecessor, and I am asking the present Chancellor to remove it. His predecessor, who is now Home Secretary, kept fireguards free of Purchase Tax. It was discovered that the Heating Appliance (Fireguards) Act, which provided that heaters, electric radiators and so on must be guarded, allowed the selling of old unguarded stocks. The electricity authority and the gas boards then said, "We will fix protective netting over


these stoves and radiators," and that protective netting was also free of tax.
When I asked for the cooker device to be made free of tax, however, the Parliamentary Secretary said that it would be wrong to discriminate between domestic safety devices which happened to fall within the scope of Purchase Tax. But there is discrimination, in that whenever a new idea comes on to the market it is made subject to Purchase Tax. We cannot read the report of any fire station without noticing the great amount of damage and the number of fires caused by children playing with matches. The Chancellor of the Exchequer himself mentioned this matter when he was Minister of Agriculture. He talked about the number of fires caused on farms because of the careless use of matches. Yet the safety lighter, which is now sold at 5s. 11d., could be sold at 1s. 11d. It carries a duty of 4s. Other types of lighter—the flint and the battery type—which sell at 5s. 11d. and 7s. 11d. are all subject to Purchase Tax.
Perhaps we ought not to expect the Chancellor to be anxious about the matter, but if he took a long-term point of view he would see that these prices were reduced, thereby reducing his own liability, and that of the nation, in connection with home accidents, which are still running at a rate of 1,500 more deaths every year than are caused by accidents on the roads.
I feel very despondent about Purchase Tax. Although Purchase Tax has been rigidly kept off children's clothing, it is most expensive, whether it be their little shoes, at £2 a pair, or their coats, which are no use whatever unless one pays £5 for them. We must therefore conclude that the act of freeing garments from Purchase Tax excites certain people to take advantage of that fact by levelling up.
I have done a good deal of quizzing since 15th April. I find that the utmost confusion exists with regard to Purchase Tax reductions. The last shop I entered, near my home, is run by a thoroughly honest man. He told me that he loses every time. He reduces the price of an article in consequence of Purchase Tax reductions, even though he has paid the tax on it. He always passes on reductions in tax. I said, "Would you rather be a dishonest man or a chump? There is

no need for you to reduce the price of an article by the amount of the reduction in the tax when that article is part of your present stock." I asked him to refer to the OFFICIAL REPORT of 24th April, when, in reply to a Question of mine, the President of the Board of Trade said that Purchase Tax was only one factor, and that he hoped that merchants, when their present stocks were sold out, would pass on Purchase Tax relief. He just hoped. He would take no measures whatever to ensure it. So there is complete confusion in this matter. Honest merchants are passing on reductions but the others are not.
I have many letters supporting my contention that some manufacturers have already appropriately increased the prices of their goods.

Mr. Burden: I know that the hon. Lady does not wish to be unfair. If some manufacturers are getting away with it, it means that there is bad buying on the part of the buyers. Most buyers know the incidence of Purchase Tax, and certainly at this time they will not pay an increase in price which would put into the pockets of the manufacturers the amount which the consumer should save by way of a reduction in Purchase Tax.

Mrs. Mann: That is a very nice and reasonable proposition to put to a Sunday school class, but it should hardly be put to Members of Parliament, who know all about monopolies, price fixing and the rest of it. If I want a Frigidaire freezer for my kitchen, how do I get over the fact that the company has already increased its price? If I want a Goblin cleaner or a Hotpoint electric iron there is the same difficulty.
Manufacturers are taking advantage of these reductions. The point is that if they were all doing it the Chancellor would still do nothing about it. When the President was asked, on 24th April, whether he would take action to compel manufacturers to pass on the tax relief, he said, "No," so if all manufacturers act in this way no action will be taken against them.
I find that most housewives and other consumers are befogged about these concessions. Some of them think that because there has been a reduction of 30 per cent. in Purchase Tax there is an automatic rise of 30 per cent. in the retail price. I have been careful in my mental


arithmetic in going round the shops. I find that a 60 per cent. reduction in the cost price does not mean the same as a 60 per cent. reduction in the retail price. When I have argued about this with shopkeepers they have become befuddled—and if shopkeepers are befuddled how can we expect consumers to know what prices they should be paying?
There ought to be enforcement. After all, this concession amounts to £41 million in the next year, and one of the things which the Chancellor ought to be able at a time when there are wage demands and threatening strikes is to say, "Well, there you are. I have done my best to keep the cost of living stable, and actually to lower it. I have given concessions to national well-being and price stability amounting to £41 million." But there is nothing at all to give the honest trader any incentive to pass on these reductions. There is nothing that would enable a trade unionist leader to say to his men, "There is a £41 million reduction in the cost of living." Purchase Tax reductions should be used to stabilise the £, wages and prices and so help not only the consumer but also our export trade.
I am sorry that there is no enforcement here. There is not even encouragement. I might sit here until three o'clock in the morning asking for further concessions, but even if they were granted I should not know whether they would really be passed on to the housewife.
This we do know—that increases are passed on. Any tax increases are passed on but concessions are in very grave doubt, and I do not think the Chancellor should allow this to stand. I do not think that he is being fair to the honest trader, and I think that he should seek some method of enforcing the passing on of reductions.

Mr. William Shepherd: If I thought that there was any possibility of traders generally seeking to benefit themselves at the expense of the consumers, I should think that my right hon. Friend would have some case for doing something. I should say, however, that on this occasion there is less chance of any advantage being retained than possibly at any other time when changes have been made in Purchase Tax, for the simple reason that today we have a fairly competitive economy and that, to sell

goods, good value has to be offered. That is a state of affairs which I understand is regrettable to hon. Gentlemen opposite, but which I have no difficulty in commending.
I must say also that the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) is on dangerous ground if she cannot differentiate between a luxury, an amenity or a necessity. In progressive society these things are always changing. Perhaps in the kind of society visualised by hon. Members opposite there would be rigidity. In the progressive society for which we on this side of the Committee stand there is a constant change of articles through these various categories, and I am glad that that is so.
I want to make a few short, general observations on Purchase Tax. I have almost become reconciled to this wretched tax. A distinguished rabbi once said that one thing that could be said about the Jews in Israel was that they had become reconciled to their bondage. I am in a somewhat similar difficulty of becoming reconciled to this tax, which I have hated so much and for so long. I will tell the Committee why I think that we shall have this wretched tax with us for quite a long time.
I had hoped for many years that we should be able to abolish it. I think that there was a time, not many years ago, when that was a possibility. I do not think that it is possible now. I believe that we have to face the fact of Purchase Tax being with us for some considerable time. The main reason is this. There are constantly growing demands by the State, for education or the Health Service, which have to be met whether we like it or not, and to get the necessary revenue we must take advantage of indirect taxation. In fact, I would say that it ought to be our aim, in the long run perhaps, to have more indirect taxation in proportion than we have today.
6.45 p.m.
Many countries get the reputation of being lightly taxed when, in fact, they are not. Germany is a specific example. If one asked a dozen people in the street which is the more heavily taxed nation, the German or the British, there would be a chorus, "Of course, the British".


When one looks at the figures, that is, the percentage of national income which is taken by the State in local and national taxation, one finds that it is as low here as it is in Germany. But the difference is this: whereas, in Germany, one-third of the total revenue is raised by a turnover tax, here a very much higher percentage is raised in direct taxation.
There is no doubt, whatever may be said to the contrary, that direct taxation to the extent that we have it in this country is a disincentive and that as an incentive indirect taxation has a great deal to commend it. Therefore, it is with some reluctance that I have come to accept this wretched incidence of Purchase Tax because I feel that in our existing circumstances it is inescapable.
I want to say a word about Purchase Tax as an instrument of planning. I have always disliked it intensely as an instrument of planning because, of course, things change so frequently on the economic front. There is no continuity. What is an effective instrument today is useless tomorrow. One of the great drawbacks to Purchase Tax is the constantly fluctuating rates. It is very undesirable to have constant fluctuation in rates. If we are to use Purchase Tax as an instrument of economic planning to follow the almost constantly changing phases in the economy, we have to keep changing the rates or the things on which we impose the tax.
Therefore, I find Purchase Tax as an instrument of economic planning disagreeable, but I would say to the Committee that I would not regard it as advisable to have it written off as a method of tax. Much as I dislike it in this respect, I cannot take the view that if we took off Purchase Tax from the motor car industry today we should further the exports of that industry. We must be realistic in this matter. The home market is in a sense easy, whereas the selling of any goods overseas is a very hard job indeed. In selling overseas one has to wait a long time for finance. The motor car manufacturer wants to get the money for the car before he has paid for the material he uses in making it, and so far as the home market is concerned he does.
It is difficult to sell cars overseas. I have no doubt at all that if, tomorrow, we took off Purchase Tax from motor cars, a large proportion would flow into

the home market and a lesser proportion overseas. Therefore, once again, though I hate this tax, I feel that we must accept it on occasion as an instrument of economic planning, though I should like to see it used as little as possible.
What can we do to make this objectionable tax more agreeable? The hon. Member for Sheffield, Park (Mr. Mulley) said that often Purchase Tax did not justify its collection. That is a mistaken impression, because one of the worst aspects of this Tax, from the point of view of the payer, is that it is easy to collect, and that is one reason why I think we shall have the tax with us for a long time.

Mr. Mulley: The hon. Gentleman is misquoting me. I said that there were items in the Purchase Tax Schedule which did not justify their existence in view of the cost they imposed upon industry and the Civil Service in collecting the tax. I was not referring to the whole of Purchase Tax because, generally speaking, that has worked very well.

Mr. Shepherd: I am sorry if I misunderstood the hon. Gentleman. I thought he was implying that the tax might be expensive to collect, which it is not.
That argument is dangerous, because if we are prepared to say that certain categories are to be dropped because, pro rata, they are taking too high a percentage in expenses and do not pay, we shall be unfair to those who pay continually in that category. I do not think that we can attempt to rationalise Purchase Tax. One must accept the evil that Purchase Tax automatically produces a whole series of anomalies.
I do not condemn the Civil Service. I sympathise with it. I am extremely sorry for the unfortunate people in the Customs and Excise Department who have to try to apply this absurd tax. They know as well as we do that half the things they have to do will not make any sense at all, and the more one tries to make sense of them the greater chance there is of making more nonsense. From that point of view the task is hopeless. But hon. Members must be reasonable about this. We have to accept a certain percentage of anomalies if we wish to raise revenue by indirect taxation in his way. Nothing that we


in this Committee can do, none of the skill of the civil servants, will take away the anomalies from this form of taxation. They will always exist.
One thing we can do is to reduce the number of classifications. That ought to be the objective of our policy. We should reduce the number of classifications and make a vow that we are not going to alter them in future. Too many classifications are the evil of Purchase Tax and the frequent changes in rates is another thing which annoys traders very much indeed. If we can reduce the rates to, say, three and make an agreement that, except in the most exceptional circumstances, we will not alter them, then I believe that this tax, objectionable as it is, would be more acceptable to trade and industry.

Dr. Horace King: I am sure that the Chancellor must have been as pleased as back bench Members of the Committee were unhappy to hear the hon. Member for Cheadle (Mr. Shepherd) advancing arguments in support of a tax which the hon. Member still regards as objectionable. The Chancellor needs no such support from any hon. Member on either side of the Committee and I am sorry to find that the hon. Member for Cheadle not only——

Mr. Osborne: Can the hon. Member tell me any tax which is not objectionable?

Dr. King: I was coming to that point, although I am certain that whatever I say will not satisfy the hon. Member for Louth (Mr. Osborne).
This has been such a non-party debate that the red lines on the carpet have almost criss-crossed. Had they actually criss-crossed, we should probably find that more Purchase Tax would have to be paid on the carpet than was paid for the present one. The curiosities in the index of the list of items subject to Purchase Tax reveals how all-pervasive is this tax. It is true, as was pointed out by the hon. Member for Cheadle, that one of the attractive features of this tax to a Chancellor is that nobody knows exactly when he is paying it and the British public do not realise how much they are being taxed in this way. The nearest approach to a tiny bit of totalitarianism in our gloriously free

democracy is made in the all-inclusive index to the Purchase Tax list.
I do not wish to call attention to the anomalies of Purchase Tax. The hon. Member for Kidderminster (Mr. Nabarro), with whom I disagree violently on almost everything under the sun, has rendered a public service in consistently calling attention to some of the many anomalies. But it is interesting to notice that the all-pervasive eye of the Chancellor extends to watchmen's tell-tale devices—I quote from the index; I think it characteristic that that should now be exempt from Purchase Tax—snoods—there we go back to Chaucer's England; rosaries; mouthwashes; Easter eggs, empty; medicated drink; crucifixes; medicated bunion rings; boudoir caps and, finally, as characteristic of the spirit of Purchase Tax, there is a tax on requisites for amusement.
Up to about two years ago I thought that Purchase Tax was on its way out. Then I noted with alarm a sort of fiscal recession regarding Purchase Tax and new Purchase Tax imposed. I hope that this debate will show the Chancellor that there is now a demand from both sides of the Committee to reduce Purchase Tax more swiftly than it is being reduced at the moment. When it was introduced during the war years the tax had two purposes. One was to discourage spending. We wanted all the goods then being manufactured to be goods which would help the war effort and we wished to discourage the manufacture of consumer goods. The second purpose was to produce revenue for the Treasury. Both reasons were unexceptional and accepted 100 per cent. by the British people during war-time. Unfortunately, although I hope to show that circumstances have changed, so much money is now involved that no Chancellor can lightly dispense with a form of taxation which brings in so much revenue.
Do we wish to discourage spending on consumer goods at this time? In my opinion, I think that most hon. Members on this side of the Committee would agree, the present danger is not that we shall produce too many consumer goods but that there will be unemployment. The present policy of the Government tends to accentuate unemployment. Only yesterday I received a deputation from aircraft designers in my constituency who


are alarmed at the shrinkage in the aircraft industry. In southern Hampshire we are seriously concerned, not that mass unemployment may suddenly arise, but about the danger of unemployment figures rising and getting out of control.
If this be so, then this is not the time to retain a tax, one of the basic purposes of which is to act as a disincentive to the manufacture of consumer goods. If Purchase Tax remains on any form of goods and, as a result, the development of industry manufacturing it is hampered, I consider that a bad thing.

Mr. Osborne: The hon. Gentleman has said that he received a deputation of aircraft workers who had cause to fear unemployment. Would the abolition of Purchase Tax affect their employment?

Dr. King: The hon. Gentleman ought not to attempt to make such a point. I merely mentioned that to give a picture of the kind of atmosphere in which we are living.
I repeat that, with threats of unemployment emerging in so many directions, this is not the time when we should add to them by threatening to create unemployment in other industries. But even were it right to discourage spending on consumer goods, this is hardly the cheapest way to do it. It seems to me a crazy paradox that at one and the same time we should have Purchase Tax imposed to stop people from buying, and, as has happened in the last three or four years, expand advertising of all kinds, by television and in other ways, to persuade people to spend.
7.0 p.m.
If we want to dissuade people from spending, a much cheaper and more intelligent way would be to reduce advertising. It would be out of order for a back bencher, in a Finance Bill debate, to propose any new method of taxation, so I will not say anything about the possibility of an advertisment tax. I do, however, say that if we want to create a disincentive to consumer spending we should tackle the problem at the root by discouraging advertising.

Mr. F. Harris: Is it Labour Party policy to propose an advertising tax?

Dr. King: I am expressing my own personal views. I hope that the hon. Member will not take the debate away

from the very broad non-party nature that it has had so far.
As a means of raising revenue, I suggest that the Purchase Tax contains an element of the least socially just method of raising taxation. I disagree fundamentally with the hon. Member for Louth, who interrupted one of my hon. Friends who spoke earlier, and, apparently, with the Economist on this question. When anyone buys an article on which there is Purchase Tax, the millionaire pays exactly as much tax on that article as the poorest widow in the land; but if that is true, the relative burden to the millionaire and the poor widow is utterly different.
I believe that all indirect taxation is regressive. The tax on beer and tobacco is regressive. Everybody is paying something that is to some extent in the nature of a poll tax in the tax that he pays on beer and tobacco. But at least one has the social consolation that nobody need buy beer or smoke tobacco if he does not want to. If, then, Purchase Tax is imposed on something which someone does not have to have, perhaps it is more socially defensible than the Purchase Tax which still remains, some of it introduced recently by the predecessors of the present Chancellor of the Exchequer, on goods which are absolute necessities to the housewife. I believe that good government at the present time would be steadily moving away from Purchase Tax in general and as a basic principle would be eliminating Purchase Tax on goods which are necessities.
I suggest to the Chancellor one or two principles to guide him in cutting Purchase Tax during the ensuing debates. I want to make some suggestions in addition to the excellent one put forward by my hon. Friend the Member for Sheffield, Park (Mr. Mulley), who said that we should by all means abolish a Purchase Tax which was not worth collecting. There may be different views about taxation. Nobody can defend a tax, not even the most loyal Treasury official, which is collected merely for the pleasure of collecting; and a 5 per cent. tax which costs 5 per cent. to collect is about the craziest thing that could exist.
I support the principle, put forward so eloquently by my hon. Friend the


Member for Coatbridge and Airdrie (Mrs. Mann), that obviously nobody can defend a Purchase Tax which is imposed on something which might save a life, and that the tax on some of the new inventions that my hon. Friend mentioned is, I am sure the Chancellor would agree, most deplorable.
I want to suggest one or two other principles so that the Chancellor of the Exchequer may put his name to some of the Amendments to the Schedules which we shall shortly be debating. Some of them would cost him comparatively little. I suggest, first, as a sound principle, that it is wrong to tax education and that it is wrong to tax welfare. As an illustration, the Hampshire County Council, attendance at whose meeting made me late for this debate, for which I apologise to the right hon. Gentleman, paid last year about £14,000 in Purchase Tax on school stationery and other school materials. This is only one branch of local government expenditure which bears Purchase Tax. I have just come away from a meeting of the council at which it was reported that last year we printed 1½ million duplicated sheets, on every one of which the Chancellor collected a little bit of Purchase Tax.
It is true that the Treasury probably paid some 60 per cent. of the Purchase Tax that Hampshire paid on its school equipment and stationery, but I suggest, again in support of my hon. Friend the Member for Sheffield, Park, that that 60 per cent. which the Treasury pays to the local authority means that for the 60 per cent. that is levied, Purchase Tax goes through all its ramifications, inflating the cost of living as it makes its way steadily around, so that, finally, the Treasury does not get a penny out of it. That 60 per cent. is levied on the local authority by way of Purchase Tax and is paid to the local authority by way of grant.
If the Hampshire case is typical, it would appear from the number of local authorities that about £2 million of educational expenditure is due merely to the incidence of Purchase Tax on school stationery and other school equipment. It may be that one of the side effects of the block grant will be to relieve the Chancellor of his 60 per cent. and impose the 100 per cent. burden entirely on the local authority, which would be a little

more logical from the Treasury's viewpoint but certainly much more painful from the point of view of the local authority.
I suggest, therefore, as the first principle, that we should scrap any Purchase Tax which is handicapping the development of our educational services.
Secondly, I would urge the Chancellor to scrap any vestiges of Purchase Tax which remain on British culture. We are living in a time when there is a battle going on between a cheap commercial culture, which may destroy everything that is precious in the culture of the world this century, on the one hand, and the worthwhile heritage of great art from the past and the work of creative artists in our own times.
Shakespeare, if he were born today, would have to pay a tax on the pen and paper he used. He would find that the Torquemadas who prepared the lists would carefully exempt him from Group 26 for his pen, excluding it from the category of articles of personal adornment, so that they could bring it under Group 34, section 6, writing implements and accessories thereto. Worse than that, he would have to pay tax as an infant learning to write with a slate pencil, if such atrocities still survived in a backward school somewhere in the country. This, of course, is a trivial example.
The much more serious example is music, which is still handicapped by the Chancellor. Britain is the only civilised country in the world which taxes the musician on the tools of his trade. Even his music manuscript paper is carefully listed and subject to Purchase Tax. I congratulate the Chancellor on what he has done so far in reducing the tax on musical instruments but I beg him, before the debate on the Finance Bill is over, to go further and scrap entirely the vestigial tax remaining on musical instruments.
It is worth while saying that in spite of Purchase Tax, Britain is a great musical nation both for composers and executants in our time, but that instrumentalists especially have a grim fight to live in an age of the mechanical reproduction of music. Purchase Tax makes their battle for existence much harder and complete exemption would do a very useful service to a struggling profession and


to a useful little industry to our export trade.
The third principle that I would put to the Chancellor is that the burden of Purchase Tax on business is a heavy one. The right hon. Gentleman could help to reduce the cost of administration, of servicing and of selling. If he were to do so, he would be helping British business in its effort to win, by salesmanship, by servicing and by commerce, dollars from abroad.
Fourthly, the burden that Purchase Tax imposes on industry is a heavy one. The tremendous list of Amendments to the Schedules show the claims of industry putting themselves before the Chancellor in the next two days. With hon. Members opposite who have spoken in this debate, I believe that Purchase Tax hurts industry in its efforts to manufacture goods and sell them cheaply abroad and at home.
I speak always from my experience in these matters. This is no light matter even in a light industry like the cosmetics industry, to which my hon. Friend the Member for Coatbridge and Airdrie referred. There is in the little town of Eastleigh, in Hampshire, a cosmetics factory which is of real economic importance to the life and well-being of the people of Eastleigh. The concession that the Chancellor has given will be much appreciated by the people of Eastleigh. As is natural, the cosmetics industry is asking for more than he has given.
That industry not only provides employment under ideal conditions for many Eastleigh folk, but it has a good export trade and is earning precious dollars for Britain. I mention this not to plead the special cause of cosmetics, but to say that if that is true of a small factory in a small town, it must, a fortiori, be still more true of great industries like the motor industry. I join with hon. Members opposite in paying tribute to what the motor industry has done to earn very precious dollars for the country.
As a summary of the four principles, I suggest that Purchase Tax might be taken off all goods which are connected with education, all which are connected with culture, all which are connected with commerce and maintenance and extension of worthwhile industries. I suggest that, fundamentally, Purchase Tax ought to be

reduced on all goods which are essential because, from the point of view of social justice, a tax on an essential commodity is an inequitable poll tax.
It may be that the four criteria I have mentioned would account for almost the whole of Purchase Tax. I would not be surprised because, unlike the hon. Member for Cheadle, I feel exactly about Purchase Tax as he used to feel until, by constant enduring of this evil tax, he has come to defend it and even to find good in it. I hope to see the day when Purchase Tax will have gone entirely. In the meantime, I suggest that taking the tax off the first two categories, education and culture, could be conceded by the Chancellor at very little cost to himself and that on the other two the line ought to be a much speedier advance than there is in his proposals.

Sir A. V. Harvey: The hon. Member for Southampton, Itchen (Dr. King) can at least say to his constituents—or they will read—that he has covered every trade, business and profession. He will get no complaints on that score.
My purpose in speaking now is to thank the Chancellor of the Exchequer for what he did for the tie industry. We saw his predecessor last year and he recognised that there was an anomaly. Now the tax has been reduced from 30 per cent. to 5 per cent. I know that the industry, especially that part in Macclesfield, is very grateful for what has been done. The reduction will certainly help the trade in its difficulties.
One hon. Member opposite was confused about Purchase Tax in relation to exports. I quite agree that if we took Purchase Tax off motor cars today it would not help the exports of that industry, but I understood the hon. Member to be generalising rather than to be, referring specifically to motor cars. In the textile trade it is a very different story.

Mr. Mulley: I explained, I think at least twice, that I was speaking about particular items. I mentioned cars and television sets. I take very much the same view as that taken by the hon. Member for Cheadle (Mr. Shepherd)—that when we have a waiting list for cars on the home market it would be stupid to take the tax off them.

Sir A. V. Harvey: We shall be able to read what the hon. Member for the Park Division of Sheffield (Mr. Mulley) said. I hope that the Chancellor will consider the effect of Purchase Tax on those industries which are now running into a rough time. There is no doubt that many industries which have traded successfully for twelve years are beginning to find competition most severe. That is where I differ from hon. Members opposite in reference to the motor car industry. They spoke of the industry in 1948, but it must be realised that then, soon after the war, one could sell almost anything, and now the industry has to face severe competition from the Germans, Italians and others. We should remember:
A man may well bring a horse to the water; but he cannot make him drink….
In dealing with any great industry, we ought to be gentle in our references to it here. The industry is helping our economy and employing hundreds of thousands of people and we as Members of Parliament ought to encourage it. It has done a tremendous job, and I hope it will continue to do so.
7.15 p.m.
In December, or at the beginning of January, deputations put their case before the Financial Secretary and the buyers hold off because they think there might be a reduction in the tax when the Budget is presented. I should like to see a longer period between these changes. I should like us to have a good reduction and to stick to it for two years. That may not be possible, but I hope my right hon. Friend will consider Purchase Tax in relation to industries which are having difficulties in trading.
In my constituency there is very little unemployment at the moment, but many are on short time and people are finding it increasingly difficult to sell goods, particularly in North America. We may be getting commodities at lower prices than we were, but the countries which supply those commodities will not have the money they previously had with which to buy our goods. I therefore hope that my right hon. Friend will do something for the industries concerned before it is too late. It is more difficult for them when the brake is put on.
I remember reading a speech which a former hon. Member of this House, Earl Attlee, made when Purchase Tax was in-

troduced. I recommend all hon. Members to read that speech. He said that this was just a temporary tax which would last for the duration of the war, and he gave very good reasons for it. From his speech, one would have expected that the tax would come off in the 1945–50 period, but that did not happen. Hon. Members say that we are saddled with this tax and that the sum involved is far too great to enable us to abolish it, but I think my right hon. Friend has done his best. He has taken a big chunk this year and reduced the tax. That has helped trade and I hope that in the difficulties which lie ahead—there are many—my right hon. Friend will use the opportunity to help our economy.
The hon. Lady the Member for Coat-bridge and Airdrie. (Mrs. Mann) made some remarks about cosmetics which I was amazed to hear. In the years we have both been in the House I have always thought she brought colour and freshness into the House of Commons and I have admired her. She has never been lacking in other decorations and I am surprised that she does not like the idea of cosmetics. Usually she is well-informed, but on this occasion she must have been completely out of touch, not only with women in her constituency, but in the whole country. I was sorry that the hon. Lady the Member for Blackburn (Mrs. Castle) left the Chamber because I am sure she would have differed from the hon. Member for Coat-bridge and Airdrie on this point. She must bring herself up to date, because the cosmetics industry is thriving and has a very good export trade.
We cannot afford to lose exports; the country must live on them. The hon. Member for Itchen referred to a factory where the industry was thriving and giving employment where it was required. I know of one or two industries which in a similar way are exporting not only to the Commonwealth but even to Northern America.
I cannot see why soaps and shampoos are taxed at 30 per cent. Surely the tax ought to be taken off these things completely.
My right hon. Friend has gone a long way in bringing some sense into the method of progressive Purchase Tax but he has still a long way to go. I have sufficient faith in him. I know that he


will do it sensibly, and indeed nobody can complain if the tax is continually reduced. I ask him to pay particular attention to those industries which are obviously affected by Purchase Tax and to alleviate their problems in good time.

Mr. Cyril Bence: This general approach to the problems of Purchase Tax on the basis of either social or economic conditions in the country as represented by the purchasing power in people's pockets and general trading conditions seems all right in the case of the motor-car industry. I have some sympathy with my hon. Friend the Member for Northfield (Mr. Chapman) in the view that the maintenance of Purchase Tax on the motor-car industry may be justified in that it pushes as many cars as possible to the export markets, especially in view of the waiting list, but this does not apply to all industries. There are industries, including one in my constituency, where the maintenance of a good, stable and even expanding home market is essential if they are to expand their export market.
Their economics and their rate of production and expansion are such that if they cannot maintain a very high rate of output from their plant they are in difficulties. It is essential that such an industry should be able to market at a very high rate and as widely as possible on the home market. I am thinking about the sewing machine industry.

Mr. Nabarro: Another Nabarro disciple.

Mr. Burden: This argument has been used before.

Mr. Bence: I have been in the House for eight years, and in every Finance Bill I have stressed this fact because, like the hon. Member for Kidderminster (Mr. Nabarro), I have been in industry and know that for many industries the whole world is their market and often their capacity to market in any country—in South America or the Commonwealth or even the Far East—depends to a great measure on the extent to which they can market their products at home at a reasonable and remunerative price.
I am particularly concerned with the sewing machine industry and the 30 per cent. Purchase Tax on all accessories of sewing machines—the cabinets and the

little things which go into them and make the machine an attractive proposition. The British sewing machine industry has been faced with very heavy competition, and any falling away in the buying of its machines will tend to increase the cost of production. The position is not the same as it was forty or fifty years ago, when capital costs were reasonably low, a large amount of labour was employed and the variable factor in costs was very large. Today the variable factor in costs is falling and fixed costs are rising. Anything which tends to cut off the sale of many products, and certainly sewing machines, will have very serious effects upon employment and upon the export of those products.
The Singer Machine Company in Clydebank is facing a sticky period at present. When wastage occurs it is not replacing it with fresh labour because the company is meeting very severe competition all over the world. Its capacity to meet that competition, not only in deliveries but also in price, depends on the capacity to command a good market in the United Kingdom. When the Chancellor imposes a 30 per cent. Purchase Tax on cabinets and the little accessories which help to make a sewing machine attractive to the buyer, he does not realise what damage he does.
I have seen sewing machines being imported into this country with many attractive designs and accessories added to them. These make them very attractive. Yet the Chancellor puts a 30 per cent. tax on the very factors which, added to a perfectly sound sewing machine—probably the best in the world; the Singer sewing machine is made in Clydebank, which is probably why it is the best in the world—make up its attractiveness. When the Chancellor puts a 30 per cent. tax on the accessories he is probably striking the worst blow he can at that product and its capacity to face competition.
It is no use displaying to the housewife an engineering device which is perfectly sound if it is not in an attractive form and a design which appeals to her eye. I am certain that the average housewife judges these appliances by their attractiveness, and in manufacturing for the home market it is always a problem for the industrial producer to incorporate with his efficiency an attractiveness of design. The 30 per cent. tax is a blow


at those people who are surrounding their mechanical device with an attractive design.
I hope that the Chancellor will look at the matter again, because the industry has already made a great contribution to our export trade. The Singer sewing machine is known all over the world. The company has been able to export to the United States and to many other countries where the Singer Company of America has failed. We have been able to compete with it and to keep up with it in design, but if the Chancellor persists in this almost punitive tax of 30 per cent. on the accessories of sewing machines, he will not only make the manufacturing very difficult but, worse still, will affect one of the great factors in this industry—the wonderful service provided by the company.
A 30 per cent. tax on all the accessories which go to servicing the machine is an attack on an aspect of British production which in the past has often been criticised both in the House and by people in trade who have said that the British manufacturer fails to provide adequate servicing of his product. Surely a 30 per cent. tax on the accessories is a tax on the servicing costs, because the accessories are supplied by the manufacturer and serviced by his service mechanics, and a charge upon service is a charge which the manufacturer must meet or pass on to his consumer.
With Japanese and German products entering our market, some much cheaper but, from what I have seen, not equal in quality to our own products, I think that the Chancellor should look into this industry, because here is a case where any punitive tax which cuts down the sales on the home market is a tax on the firm's capacity to export to the rest of the world.

7.30 p.m.

Mr. Osborne: I wish to detain the Committee for only a moment or two. The hon. Member for Southampton, Itchen (Dr. King) started by saying that Purchase Tax was an undesirable tax, and I asked him what he thought would be a desirable tax. He said that he would tell me afterwards, but he forgot to do so. In my opinion, no tax is desirable—neither Purchase Tax nor any other. We must remember that the tax raises just short of £500 million. This

is spent on what we think are desirable and requisite things.
What used to divide us as parties was the argument about whether it is better to raise the bulk of our financial requirements by direct taxation or by indirect taxation. Of course, it is very popular among hon. Members on both sides to please their constituents by asking for this or that tax to be taken off. We have just heard about Singer sewing machines. Previously, it was something to do with the making of cosmetics in another constituency. In a quite irresponsible manner, we bid for taxes to be taken off things which interest our own constituents irrespective of the effect it would have on the Welfare State, which we all support, or the security of the State, which we all know to make an inevitable call upon our resources.
The Purchase Tax raises almost £500 million. This is really fundamental. The other two principal items of indirect taxation, the duties on tobacco and on drink, raise between them about £1,100 million. By indirect taxation, therefore, we are raising by those three methods just about £1,600 million a year. A shilling on Income Tax produces about £260 million a year. Already, Income Tax and Surtax are up to 18s. 6d., so that room for manœuvre in direct taxation is now relatively very small. Even if everything were taken from the substantial Surtax-payer, it would not fill the gap left if all indirect taxation were removed.
It is very easy to try to please our constituents by pleading that they ought not to be subject to Purchase Tax in one way or another. It is a most popular plea. It catches votes like fury, but it is irresponsible electioneering. The only popular tax is the tax which falls on the other fellow or on the other constituency. Yet we each want the Welfare State for ourselves and for our people. I therefore call this kind of debate unreal, inasmuch as we are—if I may, with great respect, use the expression—playing "silly devils" with the fundamentals of our society.

Mr. Chapman: I am sure the hon. Gentleman is right in general principle, but does he want to go so far as saying that, when an industry is depressed and in grave danger, we should nevertheless keep the tax on?

Mr. Osborne: I am not allowed to discuss this; I should be out of order. We have heard talk of industry being depressed, and the word "unemployment" has been used a number of times. Again, let us be realistic. Unemployment in this country is 2 per cent. In America it is 7 per cent. In Western Germany it is 8 per cent., and in Canada it is 10 per cent. Let us not exaggerate the position. That is all I am saying.

Mrs. Harriet Slater: Is not 2 per cent. bad enough?

Mr. Osborne: It is useless to cry "Wolf" when the wolf is not there. That is all I am saying. Hon. Members on both sides who, quite reasonably, plead that Purchase Tax should be reduced or taken off the things which specifically interest themselves or their constituents ought to remember that it produces nearly £500 million a year. Until we find something to put in its place, it is very unwise to talk of taking it off.

Dr. Stross: I should like the hon. Gentleman to answer just one small point. If that is his thesis, does he extend it and say that the revenue contributed by smokers is so large that one must not do anything to diminish it or take it away, in any circumstances?

Mr. J. McGovern: Increase it.

Mr. Osborne: The hon. Member for Glasgow, Shettleston (Mr. McGovern) says that he would increase it. From a tax point of view I really agree with the Economist, that fundamentally it is better and more desirable from a social point of view to tax a man's spending than to tax his earnings.

Dr. Stross: Now will the hon. Gentleman answer my question?

Mr. Osborne: I am answering it. I would rather tax a man's smoking than tax his earnings. If I had the choice between putting up taxation by P.A.Y.E. and putting up the tax on tobacco I should not choose to put up the P.A.Y.E. tax. What the nation requires above all things is greater and more efficient production. Therefore, let us, for goodness' sake, not say "Take off the Purchase

Tax" to please our constituents without being prepared to say what ought to be put in its place. When I asked the hon. Member for Southampton, Itchen, what was a desirable tax, he was wonderfully silent.

Mr. J. Edwards: I am sure that the Chancellor would agree that it has been a very good thing indeed to have this opportunity to discuss the principles of the Purchase Tax before we embark upon the detailed and, perhaps, long-drawn-out business of examining the Schedules. It is a good thing that we should ask ourselves what considerations we ought to bear in mind in deciding what should be taxed and, having decided that, what considerations we should bear in mind in deciding the level of tax which the various things should carry.
Whether we like it or not, we must make certain assumptions for the purpose of this debate. We must assume a certain level of expenditure, which we are not able to talk about here and now. We must assume the need for revenue. We must not overlook the fact, to which our attention has just been drawn, that the Purchase Tax as a whole brings in about £500 million of revenue. This does not mean, however, that we ought not to argue with one another about the details of the Purchase Tax. Nor, indeed, when we come to the Schedules, shall we be found lacking in this respect.
We have agreed, I think, about a certain number of things. We have agreed—I am glad that certain hon. Members have mentioned it—that we ought not to blame the officials of the Board of Customs and Excise. As one hon. Gentleman put it, they deserve our sympathy rather than our blame. The truth is that they are members of a very hard working and conscientious service. We agree, also, that abrupt changes in Purchase Tax make life extremely difficult for the industries affected. I am not sure that life is not made even more difficult for them when the tax is reduced than when the tax is increased, but, in any event, we are agreed on not liking abrupt changes.
I was very interested to hear the Chancellor confess, in his Budget speech,
Personally, I have always been attracted by the idea of a general tax at a low rate, as an alternative to the Purchase Tax in its present form."—[OFFICIAL REPORT, 15th April, 1958; Vol. 586, c. 70.]


For reasons which he then gave, however, he took the Purchase Tax, modifying and simplifying it in the sense of reducing the number of rates of tax, and he lowered the overall average tax. What he did in the end, of course, was to accept the main principles on which the Purchase Tax is based, that is, that there are some things which one does not tax at all and there are some things one taxes at a very much higher rate than others.
I am sure that the Chancellor would agree that, in deciding the final form of his Schedules, he bore in mind whether certain articles were necessities, as he saw them, or whether they were things which could reasonably be expected to bear some tax, and if so, how much tax. I am sure, also, that he had some regard to the effect of what he was doing on individual industries.
For example, I noted that he took the tax off wool cloth, which pleased me, representing, as I do, a constituency where this is important. But it would be absurd to suggest for one moment that the Chancellor had not had these various considerations in mind. I would go so far as to assert that any Chancellor, faced with the need to raise money on this scale and in a position where he had to maintain Purchase Tax whether he liked it or not, would be driven to apply certain principles to his judgment.
First, he would have to consider whether a particular commodity was a necessity and whether it was right that it should bear tax. He obviously would not put a tax on bread, but he might conceivably think it right to put a tax on television sets. Moreover, he might take the view that, although certain things were not primary necessities, they had become conventional necessities, such as cultural or educational things, which ought not to bear tax.
Secondly, he would have to consider the effect of what he was doing on the economy. That was the fallacy that lay behind so much of what the hon. Member for Gillingham (Mr. Burden) was saying, because he did not ask himself questions about the circumstances in which particular Budgets were introduced. A Chancellor has to consider the effect of what he will do.

Mr. Burden: I certainly did, but I did not compare, which was perfectly legitimate, the fact that all these changes were made in the 1951 Budget during the Korean War. The Korean War was still on when the Conservative Party came into power and we reduced Purchase Tax and taxation generally; and the Korean War was won while the Tory Party was in power.

Mr. Edwards: If I were to develop this comparison it would lead me far afield, but it does not come to grips with the problem.
The second set of principles that any Chancellor must consider is the effect of what he is doing on the economy. For example, if he has a great armament drive on he has to use all the instruments at his disposal to support it. If he is faced with an acute crisis and cannot get enough exports he must not do anything which has the effect of taking goods out of the export market and putting them on the home market. As the hon. Member for Cheadle (Mr. Shepherd) said, it is true that there are limitations to the use to be made of Purchase Tax for economic planning. It is a blunt instrument, if we like, but no Chancellor can afford to ignore the consequences of what he does, first, on the economy as a whole, and, secondly, on particular industries. There must be few hon. Members who, at some time or other, have not campaigned on behalf of an industry to secure a reduction in Purchase Tax.
The third thing that the Chancellor has to consider, in my opinion, is the effect of what he is doing on industrial relations. He has to remember what the consequences of movements of Purchase Tax will have on the official index and what that will mean in terms of wage claims, and so on.
I have said this because in what I wanted to bring to bear on the hon. Member for Kidderminster (Mr. Nabarro) I wanted the approval not only of my hon. Friends, but also the approval of the Chancellor. What the hon. Member for Kidderminster did was to ignore completely every one of these considerations. There is not one of which he took any notice.

Mr. Nabarro: May I correct the right hon. Gentleman at once? As I understood his speech, the first consideration


is that the Chancellor must have a substantial volume of revenue. In the course of my speech, I was at great pains to say that the formula that I was advocating for a single rate of tax at 15 per cent. could raise an equivalent sum in revenue and, therefore, is absolutely sound.

7.45 p.m.

Mr. Edwards: The hon. Gentleman, as I rather supposed, was not listening to what I said. I set out three sets of principles and he conveniently does not refer to one of them, but refers to something that I said in an entirely different context very much earlier in my speech. My hon. Friend the Member for Flint, East (Mrs. White) and I were wondering whether, under the Paymaster-General's classifications, we had to regard the hon. Gentleman as a necessity, an amenity, or a luxury. We reluctantly concluded that we had to grade him as a luxury. I even found a heading for him in view of his lovable and endearing characteristic of preening himself. I came to the conclusion that he could be found under Group 32, "Plumage improving preparations".

Mr. Nabarro: Very poor stuff.

Mr. Edwards: Well, perhaps the hon. Gentleman will now pay attention to what I shall say about his position.
In the speech that the hon. Gentleman made on 12th May—and he told us today that his words were well chosen—he said:
I am not pleading for a retail sales tax. I am not pleading for a turnover tax. I am not pleading for the Purchase Tax. I am pleading only for one, uniform, non-discriminatory rate of indirect taxation on certain consumer manufactured goods"—

Mr. Nabarro: Call it what one may.

Mr. Edwards: Call it what one may. It may be a Purchase Tax…. It may be a turnover tax."—[OFFICIAL REPORT, 12th May, 1958; Vol. 424, c. 98.]
According to the hon. Gentleman, the important thing—and he emphasised this in his speech today—was that there should be
one, uniform, non-discriminatory rate of indirect taxation.
Then he said, in effect, "Call it what we may, it does not matter which of these things you do". Today, however, he has brought forward the idea of a 15 per cent. tax on the goods that at present have to bear Purchase Tax.

Mr. Nabarro: Would the right hon. Gentleman permit me to interrupt him once more? I am sorry to do so. He has used the word "today". If he reads my speech of 12th May he will find that I made specific reference to the fact that if the Chancellor wished to raise an equivalent sum in revenue at a flat rate of Purchase Tax it would have to be at 15 per cent. I have not suddenly advocated it today.

Mr. Edwards: The hon. Gentleman is misunderstanding me. The point I am making is that whereas, on 12th May, he did not care what it was—it could be a turnover tax, a retail sales tax, and so on—today he has moved from that position, if I understand him aright, and is saying that he wants a flat rate Purchase Tax of 15 per cent.
The Chancellor, on 15th April, said:
…Purchase Tax is for practical purposes something of a mirage. And the same is true of a turnover tax."—[OFFICIAL REPORT, 15th April, 1958; Vol. 586, c. 71.]
The Chancellor could very well have gone on and said that the same would be true of a flat rate Purchase Tax.

Mr. Nabarro: But he did not say that.

Mr. Edwards: No, but he could just as well have said it, for, after all, what would be the effect of a flat rate tax? It would be to flout every one of the principles that I contend any Chancellor of the Exchequer must follow if he has Purchase Tax at all.
Let us ask ourselves what the effect would be. I was interested in the exchange that took place between the hon. Member for Kidderminster and his hon. Friend the Member for Wycombe (Mr. John Hall), who was very quick to point out the effect of what the hon. Gentleman was proposing would be on the furniture industry. But the hon. Member is not concerned with the impact of what he does on particular industries. Nor is he concerned with the effect of what he proposes on industrial relations.
What is the hon. Gentleman proposing? He is proposing to put up the tax on all clothes and boots and shoes to 15 per cent. I remind the Committee that those commodities, between them, account for 106 out of 1,000 in the weighting system of the Index of Retail Prices. Moreover, the hon. Member does not have any regard to whether it is fair or not.
For all these reasons I am sure that I shall carry the Chancellor with me when I say that whatever alternative we may seek the one propounded by the hon. Member is not a starter. It is not a starter because if we were to try to do what he suggests we should find it impossible or impracticable; and even if we overcame all the difficulties it would be grossly unfair.
For our part—I want to make this perfectly clear—as long as we have a Purchase Tax we shall always seek to discriminate in its use so that we may see that burdens do not fall on shoulders which cannot bear those burdens. We shall always discriminate in the sense that we shall try to see it does not have an adverse effect on industrial relations, and we shall always discriminate in the sense that we shall try, not adversely in doing what has to be done, to affect those industries which are in particular difficulties.
I imagine that what I have said is not all that controversial, and I would hope to carry the Chancellor with me. I am sure that any comment he may care to make will be received by the Committee with very great interest. We commend what he has done in simplifying the Schedules, we commend what he has done in reducing the rates for certain classes, but we must tell him that we shall apply to the Schedules, in the most searching manner, the considerations which I have been advancing.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): I believe it is on record that in a previous Ministerial existence I once said in an unguarded moment that I thought Purchase Tax was a tax which fell slightly short of perfection. During the last three or four months I have learned a good deal and now I would hesitate to acknowledge that any tax which brings in £450 million could contain a substantial component of imperfection.
We have had two aims in the proposals I have made this year for Purchase Tax: first of all, to reform the tax, to try to simplify it and to streamline it and to get rid of at any rate some of the anomalies there have been in it; and to make a move in the direction of a reasonable degree of uniformity.
When this tax was first imposed there were three rates, 16⅔ per cent., 33⅓ per cent. and 100 per cent. At the end of the period of the Government of the hon. and right hon. Gentlemen opposite the rates were 33⅓ per cent., 66⅔ per cent. and 100 per cent. Since then there have been various changes made in the direction of removing anomalies and securing some measure of uniformity. This is the third reform which has been made since 1951.
I have on this occasion reduced hardly at all the coverage of the tax because I believe that it should be spread widely. I believe that if one has an indirect tax of this importance it should cover a pretty wide field and be levied at moderate rates. I have this year reduced the number of rates from seven to four, and I think that that has been generally welcomed. The rates as they will exist when this Bill becomes an Act will be—at least, I hope so, if all goes well—a standard rate of 30 per cent., and a higher rate in the case of a number of articles where I have not found it possible to reduce the rate for Revenue reasons. That is the reason in the main why I have not proposed to reduce the rate there, not because I regard those articles as luxuries——

Mr. Chapman: It does not mean anything.

Mr. Amory: I think it does. Perhaps the hon. Member will wait a moment and see.
Then we shall have a range of articles which enter particularly into the cost of living and come into the category of necessities or near necessities and which for social and economic reasons I think should bear less than the standard rate.
My hon. Friend the Member for Kidderminster (Mr. Nabarro) asked me what were the criteria we adopted for putting articles on to a rate. I think my answer to him would be that the standard rate ought to apply unless there are some substantial reasons to the contrary, in which case the articles fall either into the lower or higher rates to which I referred just now.
Hon. Gentlemen have talked a good deal about anomalies, and I acknowledge that in a tax of this kind it is too much to hope that we can remove all anomalies. We must just do our best. What we must be careful about is that in an attempt to remove some anomaly we do not create


another and worse one. I am glad to have the acknowledgment of that from both sides of the Committee.
In some cases where hon. Members proposed to remove an anomaly I have had to come to the harsh conclusion that if I were to do so the way to do so would be by putting back the tax on some articles and not by relieving other articles. In cases of this kind one often comes to the conclusion that it is best to accept the existing anomalies. I would ask hon. Gentlemen, when later in our debates they, no doubt rightly, put forward arguments for a concession on this or that article, to remember the argument that we must be sure that if we remove an anomaly in one direction we do not create others and make matters worse.
My hon. Friend the Member for Kidderminster has estimated that with a 15 per cent. flat rate over the existing field I should not be losing Revenue. I would only say that I think that he is far too optimistic in his calculation. The 20 per cent. figure which I mentioned in my Budget speech was not, or course, only over the existing field but it covered, too, a part of the field on which tax is exempted at the present time. My hon. Friend said that he did not mind whether it was Purchase Tax or turnover tax or sales tax provided it was at a flat, uniform rate. I would remind him that a turnover tax, if it were applied at the same rate on all turnover, would not be a uniform flat rate because articles pass through a number of stages between manufacture and the consumer.
Having said that, I go a long way with my hon. Friend in desiring a substantial measure of uniformity anyhow, provided that it is, as I say, fair and reasonable to all concerned. I do not think that an absolutely uniform rate would fulfil that requirement.

Mr. Nabarro: Will my right hon. Friend allow me one intervention only? Will not he agree that the probable merit of a uniform rate of tax of any of the types to which he has referred and to which I referred earlier is that it is a distinct boost to the export trade?

Mr. Amory: I am not sure that I agree entirely with my hon. Friend there, about thinking it would be a boost to the export trade. I think that every Government

have tried to ensure that the impact of Purchase Tax does not discourage exports. That is most important.
I rather agree with what the hon. Member for Birmingham, Ladywood (Mr. V. Yates) said about the difficulty of defining what is a luxury, and where that category starts and stops.
8.0 p.m.
I listened with care to the speech made by the right hon. Gentleman the Member for Brighouse and Spenborough (Mr. J. Edwards). Whenever the right hon. Gentleman speaks I find I do not agree with everything he has said, but I find generally that where we differ, we differ with moderation. This must be due to the fact that both he and I have served at the Board of Trade and in the Treasury.
The hon. Member for Stoke-on-Trent, Central (Dr. Stross) mentioned that Purchase Tax is a powerful instrument. I agree with him. He also said that he would be pleased if we could do without it. I, too, would be pleased if we could do without it. He said that philosophy came into this. I agree, but I do not think his philosophy on this is exactly the same as mine. I agree that there is room for a difference of opinion. It is a question of how far one is justified in discriminating, and I do not think one is justified in discriminating very far. Also I do not believe that one is justified in interfering more than is necessary with the free choice of an individual to spend his money as he likes. I agreed with what he said, that if one were justified in discriminating at all to encourage anything, it would be to encourage the home and the influence of the home. I must say that in my view the purpose of the Purchase Tax—and I want to emphasise this—must be to raise revenue and not to interfere with the individual's choice to spend his money as he thinks best.
The hon. Gentleman the Member for Shoreditch and Finsbury (Mr. Collins) raised a number of practical points. I agree with him that in drafting the provisions for this tax we ought to give the fullest consideration to the convenience of the trader. I was a trader myself and I have suffered at times from confusion in these matters. I, and I am sure all my officials too, wish to make the thing as simple as possible for those who have to use it.
The hon. Gentleman mentioned that retailers of furniture took profit on the Purchase Tax, as well as the wholesale value of the goods, in their subsequent sale. I would be surprised to know that retailers of furniture are taking an unreasonable profit today, because I have regarded this as a very competitive trade. However, the hon. Gentleman probably knows more about the trade than I do. There again I found in him an ally, I think, in the view that this tax should be non-discriminatory as far as possible between trades. If the need arises, I hope the hon. Gentleman will accompany me later on into the right Lobby on this point.

Mr. Collins: May I ask the right hon. Gentleman if he can give me a similar assurance that, where I can point out to him examples of unfair discrimination, he will come into the Lobby with me?

Mr. Amory: I am not sure I can give him that assurance, but I can assure him that I am open to conviction on any point he raises. I welcome the suggestions he has made to me from time to time for matters of simplification, and I shall continue to do so in any further suggestions he cares to make to me. I agree with the hon. Gentleman, too, that it is important to do what we can to make sure that the public generally understand as far as possible what is the impact of this complicated tax on all the goods they buy.
The hon. Gentleman also mentioned that, as regards materials, we were discriminating between gold and base metals in watches. I do not think he is right there. We are treating them precisely the same. In the same context he referred to furniture made of wood or metal, which will be treated the same under this Bill.

Mr. Collins: I agree that the right hon. Gentleman has removed one discrimination in wood and metal furniture, but the example of gold and non-precious metals was precisely his own example in telling me in a letter that it was impossible to lump together watches of different metals and make them subject to one tax.

Mr. Amory: If that is so I must write the hon. Gentleman another letter. He then raised the question of the timetable of Notice No. 78. My hon. and learned Friend the Financial Secretary looked into that point carefully but he found it

was not possible to advance the date any further. I wish we could but, as the hon. Gentleman knows, a list of Amendments brought about by this Bill was published the day after the Budget.
The second object on Purchase Tax which I have set out to accomplish in this Budget is to bring about some reduction in the burden falling on the taxpayer. To the best of my judgment I considered that the reduction of £30 million this year and £41 million in a full year was as much as would be right in the present economic circumstances. That £41 million reduction was made up of a gross reduction of £43½ million and an increase of £2½ million on some items.
About 100 Amendments have been put down. I am glad to say they are not all likely to be called, Mr. Duthie. If they had been, and if the Committee had agreed to them all, then I should have been the most melancholy Chancellor that ever existed, because I should have lost a revenue of £340 million. I again ask hon. Members to realise the background of this Budget. We must be practical. If they find me obdurate and hard-hearted in considering any major change, I am sure that when they consider the situation they will understand that anyone else in my position would have had to adopt the same attitude.
The right hon. Gentleman the Member for Battersea, North (Mr. Jay) mentioned the yield of £490 million as being not less than the yield would have been had there not been a reduction of £30 million. He implied that this must mean that I anticipated a further rise in costs. That is not necessarily so. There is a bigger and bigger volume of articles going into consumption as the standard of living of people generally has been rising.
The hon. Gentleman the Member for Northfield (Mr. Chapman) outlined his philosophy very clearly. I did not agree with all his views but I thought he put them very lucidly, if I may respectfully say so. My hon. Friend the Member for Dover (Mr. Arbuthnot) mentioned the difficulty he had found with goods coming into this county being charged Purchase Tax and then being re-exported without recovery of the tax. As he knows, in general there is provision for goods for export being relieved of tax. I believe he has put down an Amendment on this point, so we shall be able to discuss it later.
The hon. Gentleman the Member for Sheffield, Park (Mr. Mulley) mentioned the cost of collection. I agree with him that this is a point we must always look at. Also my hon. Friend the Member for Cheadle (Mr. Shepherd) made a point when he said that in considering whether or not a particular item should be specially treated we must look at it to ensure that we do not do something unfair to competitive traders producing similar articles.
The hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) raised the question of safety equipment. I will not reply to that point in detail today, but one naturally finds oneself in great sympathy with her view. I would only say today, as I think she has been told in previous debates, that this raises very difficult considerations indeed, because of the difficulty of discriminating between one article and another. During the course of our debate, I dare say that we shall find some opportunity to discuss that point again.
On cosmetics and whether they are a necessity or not, that is a very difficult question, and it may be an important question, too, but somehow, I think I see a red light ahead of me here, and I shall be silent on that point. I would only say to the hon. Lady the Member for Coatbridge and Airdrie that I do not know whether she does or does not use cosmetics, but she certainly looks very charming to us from this side of the Committee. I have heard it said that if men prefer beauty to brains, it is because most men see more clearly than they think. I do not know whether that is true or not.
The hon. Lady spoke about not passing on the reduction. I think I said something to her about this the other day, but I cannot believe that a distributor who seeks to exploit his position unfairly will find that he does so to his long-term advantage.

Mrs. Slater: It is not the retailer who is not passing on the reduction in Purchase Tax, but the manufacturer. That is the whole point. The retailer is in the hands of the manufacturer, and there are firms that are not doing it.

Mr. Amory: I do not quite understand what the hon. Lady says, because the tax

is not collected until after the manufacturer stage—at the wholesaler level.

Mrs. Slater: The point is that the day after the Purchase Tax was reduced, the manufacturers put up their cost price, and so the consumers did not get what they thought they would get in the way of benefit from the reduction of the Purchase Tax.

Mr. Amory: I can only say again that what I said holds good, because there is competition amongst manufacturers. Very few manufacturers are fortunate enough to have a monopoly in the sale of their products, and the answer is competition, combined with discriminating buying on the part of the public.
The hon. Member for Itchen, Southampton (Dr. King) mentioned the impact of Purchase Tax on school equipment. He and I share an interest in education, and so he touches me on a soft spot there. My answer would be that it is very difficult to administer the Purchase Tax on the basis of the end use of the product. We should get into the most appalling complications. If an article is solely used, for instance, for educational purposes, then we do discriminate, as in the case of school desks, for example, which are treated differently and are exempted and not subject to the ordinary tax on furniture.
The hon. Member brought Shakespeare into the debate, and I was not ready for that at all. I had not thought of Shakespeare in connection with Purchase Tax, but I think that Shakespeare must have been looking well forward when he put into the mouth of Celia in "As You Like It" these words:
You'll be whipp'd for taxation, one of these days.
The hon. Member for Dunbartonshire, East (Mr. Bence) spoke about accessoriees to sewing machines. I notice that he has an Amendment on the Notice Paper which will enable that point to be discussed later.
8.15 p.m.
One or two hon. Members have recommended flexibility in the administration of this tax. I agree that Purchase Tax, in the aggregate yield, could legitimately be adjusted from time to time, but not frequently, according to whether one wants to stimulate or discourage the purchasing power of the community.


That is because we must not allow, even in the aggregate, frequent changes in the total rate. What would not be a good plan would be to vary the individual rates often for any short-term change in circumstances. That idea would lead to chaos in administration.
I would finish by saying that, in spite of having been Chancellor for four months. I still will not claim that Purchase Tax is perfect. However, as I believe that in the future there will be opportunities to make some further progress in the direction of achieving a tax which, while spread over a wide field, is only at a moderate rate, I claim that the changes I am proposing this year for a reform of this tax will leave the way open, without any harsh changes or distortions in the framework of the tax, for any further progress in that direction that may be found possible in the future.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Consideration of Clauses 2 to 34 and of new Clauses postponed till after Schedules 1 and 2.—[Mr. Amory.]

First Schedule.—(SUBSTANTIVE CHANGES IN PURCHASE TAX RATES, ETC.)

The Deputy-Chairman: The next Amendment is that in the name of the hon. Member for Oldbury and Halesowen (Mr. Moyle), to page 29, line 12. I think it will be convenient for the Committee also to discuss the following Amendment in line 13, in the name of the right hon. Member for Huyton (Mr. H. Wilson), the Amendment in the name of the hon. Member for Shoreditch and Finsbury (Mr. Collins), in line 14, dealing with garden furniture, and that in the name of the hon. Member for Oldbury and Halesowen in line 17.

Mr. Redhead: I beg to move, in page 29, line 12, to leave out "Group 5 (haberdashery)".
We now pass, in our consideration of the First Schedule, from the discussion which we have been having on the broad principles and philosophy underlying the Purchase Tax to what I suppose must now be described as the pernickety details. So far as the philosophy and principles are concerned, as one of those who

had a pretty close association with the introduction of Purchase Tax, one of those luckless civil servants who have been accused this afternoon of fixing the rates of the tax but who, on the contrary, experienced just as many headaches as the traders themselves in trying to interpret what Parliament intended, I have never been able to discern any fundamental principles underlying the tax. The Amendment which I now propose is a paving Amendment to the further one to page 29, line 17, which has for its object the reduction of the tax on all items in Group 5 to 5 per cent., as distinct from the Chancellor's intention, as expressed in the Schedule as a whole, of reducing only some of the items under this heading to 5 per cent. and others from 30 per cent. to 15 per cent.
In passing, let me say that it is perhaps rather intriguing in this connection to note that a bachelor Chancellor with great gallantry is going the whole hog in reducing the tax on ladies' modesty vests from 30 per cent. to 5 per cent. I am not claiming that 5 per cent. in this connection has any particular virtue as a rate. Indeed, I feel in regard to the whole range of articles to which this rate applies, it might well be that we could eliminate the tax entirely without any serious effect upon the revenue, and thus avoid a good deal of the vexatious nuisances where trade is concerned. In this connection, 5 per cent. is proposed on the grounds of equity and uniformity which the Chancellor has expressed to be part and parcel of his general concern in this matter.
In the same sub-paragraph of the Schedule (1) (1, c), the Chancellor also seeks to reduce from 30 per cent. to 15 per cent. the tax on many other articles of wallpaper and certain other papers and articles of paper which appear in Group 10, and upon garden furniture in Group 16 (b), and upon trophy cups in Group 26 (c). I want first to turn my attention to Group 5 and to haberdashery.
The Chancellor's purposes in all these revisions of the Schedule have been explained as being part of his desire to seek simplification and clarification and, as he expressed it, to bring about a greater degree of uniformity in these matters. He rightly claimed that it is impossible in a tax of this kind to avoid all anomalies. That is apparent. He


went on to say that it was his desire, in seeking to remove existing anomalies, that he should not produce another crop. In this category, that is precisely what he is doing.
Whereas he has reduced the number of tax rates from seven to four over the whole range of Purchase Tax, in this category he has taken a whole range of articles which were formerly subject to one common rate of tax and has applied to those articles no fewer than three rates of tax; for he has reduced the tax on some from 30 per cent. to 5 per cent., on others from 30 per cent. to 15 per cent. only, and, by taking some completely out of Group 5 and proposing to constitute an entirely new group, he is maintaining the tax on others at 30 per cent.
Some further explanation is required of why some articles are being left at 15 per cent. whereas others are having the tax on them reduced to 5 per cent. I notice from Notice 78N that the rate is to be reduced only to 15 per cent. in respect of hand embroidery frames, darners, wool winders, needle cases and similar requisites for domestic needlework. What distinction is drawn between those articles and others elsewhere in the group where the tax is being reduced to 5 per cent. is not clear.
Likewise, the tax on blind acorns and tassels, covered upholstery nails and other upholstery trimmings, tie presses, shoe trees, coat hangers, button hooks, shoe horns, glove and stocking stretchers and driers; garment protectors, mothproof covers and shoulder covers is being reduced to 15 per cent. In addition to that, for some inexplicable reason, the Chancellor feels that it is now appropriate to remove bootlaces from exemption and with insoles to charge them at 5 per cent. Again we are entitled to some explanation of why in the pursuance of uniformity the Chancellor wants to remove an exemption of long standing and also to remove from exemption hat pins and tie pins which are to be charged at 30 per cent.
I cannot believe that these changes will make for simplification and clarification in the understanding of the Schedule by the trades concerned. Let us examine what sort of anomalies will now be created. I can quote only a few inconsistencies and incongruities which are difficult to explain. Garters and

suspenders are to be chargeable at 5 per cent. but a stocking holder or drier will be chargeable at 30 per cent.; the tax on a coathanger is to be reduced from 30 per cent. to 15 per cent., whereas the hat stand upon which the hanger may be placed will be chargeable at only 5 per cent; a tie press or shoe tree will be chargeable at 15 per cent., but the wardrobe in which those articles may be reposed will be chargeable at only 5 per cent. A glove and stocking stretcher will be chargeable at 15 per cent. but the clothes holder will be chargeable at only 5 per cent. Bootlaces which have hitherto been exempt will, along with corset laces, now be chargeable at 5 per cent. A garment cover or mothproof cover will be chargeable at 15 per cent. whereas the garment upon which they may be placed will be chargeable at only 5 per cent.
The Chancellor would agree that in seeking to produce what he describes as uniformity and to remove some anomalies he has created other anomalies. It is interesting to observe that the tax on military buttons, pips and stripes is to be reduced to 5 per cent. whereas ordinary buttons for civilians, if bought as replacements as distinct from being part of the garment, are to be taxed at 30 per cent.
I cannot believe that there is much difficulty in the Chancellor's acceding to my suggestion that the whole group should be reduced to 5 per cent. without any of the exceptions. The revenue from this group, even at a general charge of 30 per cent.—and clearly the Chancellor expects a substantial reduction in that—hitherto has been only a little above £6 million.
I will leave to my hon. Friends with more knowledge and perhaps detailed acquaintance with the trades concerned the arguments about other specific items. However, I must point out that wallpaper is another item which has been previously chargeable at 30 per cent. but which is to be reduced to 15 per cent. I urge upon the Chancellor that there is here a very strong case for going even further and reducing that tax, as has been proposed, to 5 per cent. Indeed, one can make a very logical claim for the complete exemption of wallpaper and its kind and thus sensibly make some contribution towards easing the burdens in what


all of us know to be the heavy expenses of home decoration. That would be reasonable since there is no Purchase Tax on paint, distemper or varnish or other essential materials for home decoration.
I have a lively recollection of when the tax on paper household goods was first included in the Schedule. Everybody said that that must include such things as paper baking cases and that they were therefore chargeable under that heading. I remember how the trade revolted against the idea and how the confectioners said that these cases were not household paper goods but were their stock in trade in the sale of cakes and confections in the ordinary commercial way. The Commissioners of Customs and Excise solemnly decided that they could settle this terrible dilemma only on some basis of dimension. If I remember rightly, being associated with the great decision, we decided that a chocolate eclair case which measured 3¾ inches must be for the trade and not chargeable, whereas if it were less than that it would fall to be chargeable to Purchase Tax.
Even here there is a strong case for exemption under this heading and if one were to refer to the classification in Notice 78 one would see some remarkable incongruities, as to what should and should not be chargeable under that head. All that is being asked for is some degree of uniformity.
The Chancellor is not being called upon to make very great sacrifices, for the total revenue from the whole of Group 10 which has been chargeable at 30 per cent., including not only wallpaper but display paper and household paper goods, has been just under £5 million. In any case, the Chancellor is clearly clipping a good deal off that by his present proposal.
8.30 p.m.
Garden furniture is also included in the list of articles in respect of which it is proposed to reduce the tax from 30 per cent. to 15 per cent. Again I ask why it should not be reduced to 5 per cent. It would be logical to put garden furniture in parallel with the whole range of ordinary domestic and office furniture which, under another group heading, is chargeable at only 5 per cent. This would make for the simplicity, clarification and greater degree

of uniformity which is the express desire of the Chancellor's revisions. The revenue under this head must be very trifling, for even at the current charge of 30 per cent. the total for the whole group is apparently so insignificant that it is not even listed separately but comes under the miscellaneous heading which yields only about £3 million.
Trophy cups are the subject of a proposal for a reduction from 30 per cent. to 15 per cent. They are awarded as prizes, and I will leave one of my hon. Friends, who feels keenly about this matter, to develop the case that she believes exists for the total exemption of these articles.
In general, however, I hope that it will be recognised that this is a constructive Amendment, designed to fulfil the purpose that the Chancellor had in mind, not only of bringing about a greater degree of uniformity but avoiding the creation of a further crop of anomalies. I suggest, therefore, that in the present circumstances—if the Financial Secretary will not take it amiss—that the Chancellor could chance his arm in this regard without any undue risk.

Mr. Moyle: The Financial Secretary and the Chancellor have listened to the pleas made by hon. Members on both sides of the Committee for reductions in, or the abolition of, Purchase Tax. All I want to say to the Financial Secretary, in the absence of the Chancellor, is that I see no hope of the return of the Government after the next Election unless they abolish not only Purchase Tax, but all taxation. That is their only hope of escaping what awaits them at the Election.
The Chancellor has explained a number of times why these variations in Purchase Tax rates have been made. He has said that he has acted in the interests of equity, to make the adjustment more equitable in relation to other articles, or to make the system more logical. There is a later Amendment, in page 29, line 17, at the end insert:
(d) for any charge at 30 per cent. under Group 5 (haberdashery) there shall be substituted a charge at 5 per cent.
in the name of some of my hon. Friends and myself, and I propose to refer to the subject matter of that Amendment now. I have been told that it will be in order for me to do so.

The Deputy-Chairman: Yes. I have suggested that the Committee should also discuss that Amendment.

Mr. Moyle: What has the Chancellor got against buttons? This serious omission cannot be explained upon grounds of equity or logic. I can explain it only on the ground of sheer vindictiveness. I do not know whether the Chancellor had the experience that I did, but I remember that when I was a young bachelor the use of cotton and needles was completely out of my competence, and I was attracted by an advertisement urging me to buy a set of bachelor buttons. I fell for that advertisement.
I carried out the instructions which said that I must bore a hole in the top of the trousers and press this button in, aided by a kind of gadget on the other side of it, and, by that means, avoid the use of needle and thread. That was all right, but when I completed the operation and used that method of keeping my trousers up, I found that in the course of a week the top part of the trousers was leaving the lower part, and as a consequence I felt a deep resentment against the button manufacturers for exploiting my credulity in that way.
I want to ask the Financial Secretary whether he will inquire of the Chancellor whether he had a similar experience, he being, of course, a long-time bachelor, and whether his experience had set up in his heart and mind the kind of resentment that I felt against button manufacturers when I was "led up the garden" by them. There must be some subjective psychology to explain this peculiar exception of the button from the relief of Purchase Tax from 30 per cent. to 5 per cent.
Let us see what family the button is included in. I would say for the benefit of the Financial Secretary that I am advised by the trade that the classical definition of a button is "a common device for fastening clothing," and that that is the particular button in which I am interested. Together with other common devices for fastening clothing, there are hooks and eyes, press studs, snap fasteners and zip fasteners. These common devices for keeping one's trousers up and fastening one's clothes are competitive articles in the market in relation to the button.
The extraordinary thing is—and I beg the Financial Secretary to have a look at this—that in this Budget the Chancellor has decided to reduce the tax on all the articles I have mentioned, and which have something in common with a button from 30 per cent. to 5 per cent. and has left the poor button to stand in splendid isolation. I wish to know the reason for the apparent distinction, and this crippling of the trade of button making. Why should this embargo be imposed on the button and the burden relieved from its competitors? That cannot be explained in terms of logic or equity, so I beg the Financial Secretary to try to find out what went wrong. I have a constituency interest in this——

Mr. Osborne: Now we are getting down to it!

Mr. Moyle: My hon. Friend the Member for Merthyr Tydvil (Mr. S. O. Davies) has a constituency interest and my hon. Friend the Member for Ladywood (Mr. V. Yates), who made an admirable speech, has a certain interest in the matter. The astonishing thing is that I have not been able to persuade the manufacturers who briefed me to join the Labour Party. But they have asked me to try to melt the Chancellor's heart, because representatives of the trade have failed to do so. I should warn the Financial Secretary that if I secure this concession, I may also recruit a number of people to the Labour Party.
The firm in my constituency which is affected has been in existence for over 100 years and there is a healthy export trade combined with this industry. The hon. Member for Croydon, North-West (Mr. F. Harris) spoke continually of the need to reduce Purchase Tax on articles in which he was interested because it was vital to provide a buoyant market for them. If the Government wish the firm in my constituency to continue to export, it is vital that this anomaly should be removed. The button must be put on equal terms with other competitive articles.
The Chancellor has an interest in this matter. A lounge suit takes about 36 buttons, and the Chancellor is still a bachelor. I feel that if the Financial Secretary works things rightly, I shall be able to secure a concession which will gladden the hearts of those engaged in this industry.

Mr. John Harvey: I am not unsympathetic to some of the arguments advanced by the hon. Member for Walthamstow, West (Mr. Redhead) although I appreciate that the Chancellor may look with a more jaundiced eye than did the hon. Member at the suggestion that £2 million or £3 million, or a few hundred thousand pounds here and there, do not matter very much.
I wish to take up the point that the hon. Gentleman's constituents and mine have an interest in the old-fashioned phraseology of part, at any rate, of paragraph (1, c) referring to "baskets and other cane or wicker receptables"——

The Deputy-Chairman: Order. The hon. Member is referring to an Amendment which comes later.

Mr. Harvey: I was under the impression that we were discussing a number of Amendments together, Sir Gordon.

The Deputy-Chairman: The next Amendment deals with baskets.

Mr. Harvey: I am sorry. I will wait until we discuss that.

8.45 p.m.

Mr. Collins: I hope that the hon. Member for Walthamstow, East (Mr. J. Harvey) will have an opportunity to speak later, because I shall be interested to hear his observations on the subject which concerns him. Meanwhile, I hope that the Financial Secretary, who is perhaps having a little difficulty with his own buttons, will, for that reason, pay greater attention to what has been said by my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle).
I will not apologise for going from buttons and bows and hairslides and bibs to garden furniture. They have nothing in common except that in both sections we on this side of the Committee are asking for a reduction in the tax from the present rate of 15 per cent. to 5 per cent. I understand that it has been agreed for the convenience of the Committee that these matters should be introduced in a general debate. I therefore ask the Financial Secretary to consider particularly this application that we are making for the tax, which formerly was 30 per cent. and which the Bill reduces to 15 per cent., to be further reduced to 5 per cent. and, therefore, brought into line with the generality of furniture.
I have to declare both a personal and a constituency interest, because in my constituency more furniture is made than, I think, in any other in the country. I ask the hon. and learned Gentleman, when he consults his right hon. Friend the Chancellor of the Exchequer about the Amendment, to have particular regard to the right hon. Gentleman's dictum that the object of Purchase Tax is primarily to raise revenue and not to discriminate between one article and another. The right hon. Gentleman is discriminating in a marked degree against garden furniture as compared with nearly all the other types of furniture on which the tax is 5 per cent.
The Chancellor has just told us that he has had to resist demands for the removal of anomalies because he could remove them only by raising the tax. This is an example where no such disability exists. The right hon. Gentleman can easily remove this anomaly by reducing the tax. He may be said to have recognised this fact already by reducing the tax from 30 to 15 per cent., but why leave it there? Last year, we pointed out that there was a similar discrimination against hall stands and similar hall furniture and against metal office and other furniture. We are glad to know that in this Bill the Chancellor has seen the light and removed this discrimination by bringing them all in at 5 per cent.
Why has the Chancellor not taken the same step with garden furniture? It cannot be that this is a luxury group, although, there again, the right hon. Gentleman told us this evening that he would not be prepared to define what was a luxury article. I remind the Financial Secretary that garden furniture includes the humble deckchair and even camp stools. Why should these things, costing, in some cases, less than £1, be taxed that 15 per cent. when the most expensive dining suite or bedroom suite costing £300 is taxed at only 5 per cent.?
Included in this group are slatted seats and tables of the kind used in public parks and gardens. They must perforce be of an exceptionally strong and utilitarian character. It is indefensible that they should be singled out for this special impost, especially when they are purchased largely by local authorities and the Treasury must, in any case, pay


a considerable part of the cost of the tax.
When one examines the list, it positively bristles with anomalies, all of which could be removed if the tax was reduced to 5 per cent. For example, a table in a café used indoors is taxed at 5 per cent., but as soon as it is put outdoors and a hole is cut in it to take a sun umbrella, it becomes a garden table and a tax of 15 per cent. must be charged. This is abject nonsense.
A café proprietor decides to give some protection from the sun and to serve his customers with al fresco meals as a greater means to health and he immediately has to pay another 10 per cent. in tax. In the same way stone seats and stools are subject to this discrimination which the right hon. Gentleman and the Financial Secretary say they are determined to avoid.
These garden seats, apart from the stone ones, are of the knobbly, rustic kind and are quite inexpensive. They are rather hard and uncomfortable and there seems no reason why higher tax should be paid on them.

Mr. Simon: They are not a luxury.

Mr. Collins: I quite agree. If people are so hardy that they determine to sit on them why should they suffer the further disability of paying an extra tax? We laugh and joke about these things, but people do not joke about them outside. They are quite unacceptable. Traders and people who examine these things think that we are daft to have these differences, for which there seem to be no sound reasons. We cannot justify the imposition of a tax three times as high on a comparable article in the garden than on a piece of furniture in the home.
It becomes still more indefensible if we compare humble garden articles with those luxuriously comfortable folding lounge chairs with Dunlopillo cushions sold at £30 each, which can be bought in a West End store and on which, quite properly, the tax is 5 per cent. Why is it that fern baskets, in the garden group, are taxed at 15 per cent. but that similar cane baskets, mainly used by exhibition and display florists, do not pay tax at all? They are the same, except that one is made of wire and the other is made of cane.
What is garden bordering wire? Is it a special kind of wire and, if so, how can it be distinguished from other wire? If it has spikes on it I understand that it is still garden bordering wire. I should also like to know why fishing stools are included in garden furniture. I say this in all seriousness to the Financial Secretary and I hope that if he cannot consider it tonight he will certainly consider it before we finish the Finance Bill. The plain, undeniable truth is that there is no justification for the continued existence of Group 16, the garden group. In my submission it was built up for reasons and under a variety of conditions which no longer exist. Lawn mowers could easily go into Group 12 and the rest should be in Group 11 and taxed at 5 per cent.
What I have said has been based on practice for at least twelve or fourteen years. These are facts I am giving the Financial Secretary and they are the result of discussions long since past and settled. I ask him to have a look at the possibility of doing away with Group 16 altogether, putting lawn mowers in Group 12 and garden furniture, where it belongs, in Group 11, and then he could accept my proposal and tax it all at 5 per cent. We should then save ourselves a lot of trouble and it would not cost a great deal of money. The Chancellor has made some substantial and welcome strides towards simplification and against discrimination, and this is one more step which he could take without any substantial loss of revenue. He would, at the same time, remove a whole crop of anomalies.

Mr. R. H. Turton: While I do not support the full sweep of the Amendment, which is very wide, I support the arguments used by the hon. Member for Oldbury and Halesowen (Mr. Moyle), who referred to the button industry. It seems to me that the Chancellor has made a curious mistake. In a previous Budget, the position was that buttons, hooks and eyes, zip fasteners, snap fasteners and slide fasteners were all taxed at 30 per cent.
This is a highly competitive industry. The button manufacturers try to get the garments fastened by buttons, while their competitors try to get them fastened by press tuds for the trousers or hooks and eyes for other garments. This is there-for hurting one part of the industry to


the advantage of the remainder, and I am certain that that is the last thing that my right hon. Friend wants to do. I ask him to give us an explanation why he has chosen to help the hook and eye and the zip by reducing taxation on them from 30 per cent. to 5 per cent. while leaving that on buttons at 30 per cent.
It has caused considerable worry to the button manufacturing industry all over the country. There is a large button factory in York where my constituents work, and I am therefore personally interested in the matter, but, quite apart from that, the Budget seeks to remove anomalies and not to create them. An anomaly has been created here, and I should like an explanation from the Financial Secretary of why it has been done.

Mrs. Harriet Slater: Perhaps I should tell my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle) that if he is unfortunate enough to lose some buttons he has to pay tax on the needle requisites necessary to stitch on fresh buttons.
If one looks carefully at the whole of this group which we are discussing one finds numerous anomalies in it. For instance, children's reins, with or without harness, are taxed at 30 per cent. while other safety reins or belts are tax-free. To a mother with a small child who wishes to dash around the whole time children's reins which are harnessed are an essential piece of equipment. With them, when she takes the child out she has at least some measure of safety and she can control the child much more closely. The mother with small children who takes them shopping can be harassed if they try to run away, and in the interests of her safety and that of her children I ask that these reins should be included in the examption given to other safety belts.
Perhaps I may turn to the question of wallpaper being brought within the terms of the Amendment and the tax on it being reduced to 5 per cent. This was mentioned by my hon. Friend the Member for Walthamstow, West (Mr. Redhead). If we impose a heavy tax on wallpaper we tax both cleanliness and the woman who is houseproud. It means that if the woman who is houseproud is not content to leave the same wallpaper

on the walls for ever and ever, or at any rate for many years, she must pay a heavy tax on the new wallpaper. I am sure that all of us who are interested in both cleanliness and the houseproud woman would like the Financial Secretary to speak to his right hon. Friend on the subject and to see whether, even though some reductions have been made in the taxation on wallpaper, there cannot be a further reduction to bring it within the scope of the Amendment.
The next question I want to raise is that of trophy cups. The time has passed when just a few schools use them. Almost every school now has its array of cups for swimming, cricket, football, rounders, netball or table tennis. Our youth clubs also have them. Instead of relying upon the old-fashioned method of punishment for children who do not measure up to the standards and conditions prevailing in our schools, we are trying to encourage the team spirit. We have instituted the house system and we encourage competition in schools—something which hon. and right hon. Gentlemen opposite are very fond of bringing in in other respects. I can think of many ordinary schools, junior schools and secondary modern schools, as well as youth clubs and other centres, where the fact that there are trophy cups to be won by individuals or teams makes a tremendous difference in the outlook of the children and encourages a good general spirit in both sport and conduct.
I ask that the trophy cup shall no longer be regarded as it was, perhaps, twenty years ago when only a few clubs or organisations had them. Because of their importance in developing a good interest and spirit generally in our schools and clubs today, trophy cups also should be brought within the terms of the Amendment.
9.0 p.m.
There are all manner of other discriminations within the general provision we are discussing. For the life of me, I cannot understand why the poor housewife who has to darn her husband's socks, if he still insists upon wearing woollen ones instead of nylon or Terylene, should have to pay tax on her darner. I cannot understand why, in these days of mechanisation when we are trying to encourage people, particularly women, to take up doing something with their hands


like needlework or embroidery, we should put a tax on the embroidery frames and implements which are used. The woman who tries to save money and bring comfort into her home—perhaps even being successful in persuading her husband to do something also—has to pay tax on the winder she uses for her wool if she wants to make gloves or some such article in her own home.
If we could bring about a general reduction to 5 per cent., we could, at one sweep, almost wipe out very many of the anomalies which exist.

Mr. S. O. Davies: I do not propose to roam into the innumerable anomalies dealt with by these Amendments because my hon. Friends have done that work extremely well tonight, but I must give what support I can to the plea made from both sides of the Committee to end the extraordinary anomaly in the tax on buttons and zip fasteners.
I have a substantial interest in this plea which I make to the Chancellor. I cannot for the life of me appreciate the extraordinary sense of humour of an hon. Member who laughs, who makes a great forced laugh out of any honest declaration made by an hon. Member on either side of the Committee. Of course, I know that this anomaly exists, and I know how grievous its effect is. I have assembled all the proof anyone could need in my constituency where there is a struggling industry, employing many scores of my constituents, which needs this concession from 30 per cent. down to 5 per cent. I hope that hon. Gentlemen opposite will really try to restrain their peculiar sense of humour in matters of this kind.
I do not know whether the Chancellor can really explain this anomaly. The button on one's shirt or trousers, as has been said by my hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle), is placed in a totally different category from that of a zip fastener or a hook and eye. I do not understand that. There are, however, graver reasons why the Chancellor should reconsider this matter. He can easily verify this fact. I am led to believe that the struggle in the button industry has been extraordinary difficult during the last 12 or 18 months. Old-established button factories have been closed down in that period.
I hope the Chancellor will make inquiries along the lines that I have suggested, because we must not forget that the competition in buttons from abroad is extremely intensive and places the British manufacturer in an extremely difficult position. The Chancellor might make inquiries about the quantity of buttons that come into this country from Hong Kong. I am the last hon. Member to suggest that anything should be done to place the people in Hong Kong in greater difficulties than they are in at present. But we know that the conditions under which those people work and are paid are not comparable with those of people who are employed in the same industry in my constituency.
In view of these considerations, I say to the Chancellor that there are the strongest reasons why this anomaly should be removed. In view of the fact that button factories have been closed in the last 18 months and that competition from abroad is getting keener every week, I hope that the Chancellor will place buttons in the same category as zip fasteners as hooks and eyes.

Mrs. Barbara Castle: Every hon. Member has a personal if not a constituency interest in buttons. I do not suppose that there is any hon. Member who is not dependent on buttons in the very personal sense of the word. I hope that the Chancellor has listened with sympathy to the compassionate appeal made by my hon. Friend the Member for Merthyr Tydvil (Mr. S. O. Davies). I can say nothing to add weight to his very moving plea.
I want to refer to the speech of my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). I agree with her on the two points that she emphasised about wallpaper and trophy cups. However, I should like to correct her on one small detail. Our Amendment asks for the total exemption of wallpaper from Purchase Tax, not a reduction of 5 per cent., to which she referred.
The reason why we are putting forward this case for wallpaper is that we cannot understand why, at this stage of our postwar developments, successive Chancellors should continue to regard wallpaper as a semi-luxury. In the last Budget the Chancellor halved the Purchase Tax on carpets and linoleum. At that time wallpaper was and has continued to be in the same


group, but wallpaper remained at 30 per cent.
For the past year wallpaper manufacturers and the general public have had to suffer this heavy tax although other items in the same group have been reduced. It is incomprehensible to us why there should be a differentiation to the disadvantage of wallpaper. We shall have something to say later about carpets, but what we are saying about wallpaper now is that it should be grouped in the category to which it naturally belongs, that is the category of materials used for interior decoration, such as paints, varnishes and distemper. If they can be exempt from tax it is difficult to understand why wallpaper should be picked out in this way.
We are all delighted to know we have passed through the period of post-war austerity. There has been a flowering of colour in our homes and an absolute boom in redecoration, interior and exterior. It has done an enormous amount to brighten the lives of people in our cities and in the countryside, too, in the last few years. It has done an enormous amount to lift the morale of every one of us. There has been a tremendous boom in "do-it-yourself" because very few working-class people—great masses of our people—can afford heavy bills for professional interior decoration. All the magazines contain advice on how to put up wallpaper and how to do the paint-work, and so on, and there has been a great public response.
In my part of the world there is a preference for wallpaper. If the people there were free to choose between various materials bearing similar Purchase Tax my constituents would plump for wallpaper rather than distemper. At this time of stringency they have to consider price as affected by tax when choosing between taxed and untaxed materials. This tax puts a burden of an extra 6d. a roll, roughly, on the most popular ranges of wallpaper, that is, wallpapers costing between 4s. and 6s. a roll, which are what most people look for when they start a brightening up campaign in their homes. Sixpence on a roll is an addition to the price which makes them think twice about buying it.
We are now in a situation in which I am told by a firm of wallpaper manufacturers in my constituency that this year the anticipated spring boom in wallpapering is not taking place, and that there has been a reduction in demand compared with this period last year. They fear that that may be related to the short-time and general falling off in employment locally. They fear they will feel the pinch, that there will be a snowballing effect. Short-time in the cotton mills means that the cotton workers have to postpone certain domestic amenities such as redecoration. That hits the local firm of wallpaper manufacturers, so trade is reduced, and so the effects go on, snowballing.
We on this side of the Committee feel very strongly that this additional burden of 6d. is too much in circumstances like that. The firm in my constituency tells me that for every £1 they pay in wages they have to pay £1 in Purchase Tax, and that is a very heavy item indeed, particularly when the wallpaper industry has been suffering under the very steep rise in the prices of its raw materials. The Chancellor of the Exchequer will be well aware that the price of the basic paper on which they work has risen from about £10 pre-war to £73 per ton now.
9.15 p.m.
Therefore the wallpaper manufacturers are being squeezed between the rising price of their raw material and the burden of Purchase Tax. We ask the Chancellor of the Exchequer, in the interests of the "brighten your home campaign", and in the interests of lifting the burden of tax from a household essential, to put wallpaper into the exempt class with paint, distemper and varnish.
I want to put a brief point about trophy cups. I know it sounds a rather frivolous item from which to suggest the tax should be removed, and hon. Members can have a little laugh about it. It sounds as though one was suggesting it for the sake of suggesting reductions in tax, which is always popular. However, I want seriously to ask the Chancellor to consider the point made by my hon. Friend the Member for Stoke-on-Trent, North. It was brought home to me very vividly only this last weekend when I was in my constituency.
I was attending the thirteenth year of the Blackburn Festival for Music, Drama and Ballet. This is a cultural activity


and the local enthusiasts have managed since the war with a certain amount of local authority financial help. It is not very generous because the Government's economic policy has been squeezing local authority expenditure so much by the pressure of high interest rates that there is not all that much money to spend. When I went along to the finals in the junior section of the musical part of the Festival, it was brought home to me what an important part these festivals play in the life of the children locally, and what it means to them to win a trophy. We had the threadbare situation that the compére of the festival had to plead twice during the week for some generous donor to produce another trophy because they were a couple short.
I realised that this was a serious item because about seventy trophies have had to be found to reward all the classes and all the sections in this festival—

The Temporary Chairman (Mr. Malcolm MacPherson): Order. I am sorry to interrupt the hon. Lady, but I am afraid she must leave the discussion of trophies until we discuss the Question, "That this be the First Schedule to the Bill."

Mrs. White: With great respect, Mr. MacPherson, we were told by your predecessor in the Chair that it was in order to discuss garden furniture and trophy cups under the general heading of haberdashery.

An Hon. Member: And wallpaper.

The Temporary Chairman: I am enlightened and grateful to the hon. Lady, but I am still rather puzzled. According to my reading it would not be in order, but I will certainly give the hon. Lady the benefit of the situation.

Mrs. Castle: Thank you, Mr. MacPherson, I am very grateful to you. I ventured on this theme only because previous speakers had been allowed to refer to this subject.
I say to the Chancellor in all sincerity that these trophies play a very real part in the lives of schools and of children engaging in these local contests. I saw the junior choirs who had competed for one section of this Festival. One of the local primary schools had proudly won a trophy, and then there was a shortage

of one trophy because the local authority grant had run out. The appeal made to the members of the audience did not meet with a very rapid response because one could see people who would have liked to give a trophy making a rapid calculation—about £20 or £30. It is a big item, and an important part of that cost is represented by Purchase Tax.
It is therefore on serious grounds of public interest that we ask the Chancellor of the Exchequer to remove the tax on trophy cups which, after all, are not for personal enjoyment but are symbols of, and part and parcel of, widespread sporting and cultural activities.

Mrs. Eirene White: It is not very long since we had one of the usual reasonable and friendly speeches which we come to expect from the Chancellor of the Exchequer, in which he said that in dealing with the Purchase Tax his aim was to simplify and to streamline it and, as far as possible, to get rid of the anomalies. Had one left it at that, of course, everything would have been satisfactory, but the moment we turn from Clause 1 to the consideration of the First Schedule, on which we are now engaged, we find at once that, far from simplifying or streamlining it or getting rid of the anomalies, it so happens that the particular section with which we are especially dealing, that of Group 5, has become considerably more complicated and a number of anomalies have remained.
My hon. Friends have dealt with the major matters that we wished to discuss. It is true that one or two anomalies have been removed. I notice, for example, that whereas previously nightdress tops were charged at 30 per cent., whereas the rest of the garment was charged only 5 per cent., all are now to be charged at 5 per cent. My hon. Friend the Member for Walthamstow, West (Mr. Redhead) drew attention to the matter of ladies' modesty vests. There was an anomaly between ladies' modesty vests and blousettes. Modesty vests must not exceed 14 inches at the front and 10 inches at the back. If the garment exceeded those measurements, it became a blousette. If it was a modesty vest, it was charged 30 per cent. and if a blousette it was charged 5 per cent.
It seems to me that what would be a modesty vest for my hon. Friend the


Member for Exchange Division of Liverpool (Mrs. Braddock) would probably be a blousette for my hon. Friend the Member for Blackburn (Mrs. Castle). I would at least congratulate the Chancellor on the fact that now there is no discrimination between modesty vests and blousettes, and I think that he has done something very worth while there.

Mr. Redhead: Would my hon. Friend allow me to point out that it is fair to remark that the Chancellor has at the same time reduced the tax on shirt dicky fronts to 5 per cent., so that there is to be no sex discrimination?

Mrs. White: I agree there is to be no sex discrimination, and we give him a good mark for that, but he has at the other end met the Freudian wish of the hon. Member for Kidderminster (Mr. Nabarro) and imposed a tax on corset laces, which seems to me quite unnecessary.
The article of haberdashery which has aroused the greatest discussion has been the button, and I am sorry that the Chancellor was not here in person to listen to the really impassioned pleas made to him on both sides of the Committee. He has given way at very great expense indeed on dividend stripping, and at very much less expense on miners' helmets, and I strongly suspect that he will find it politic to give way on buttons. It is quite clear that there is very strong feeling in this matter. He has now discriminated against buttons, having left them at a very high rate of tax, and having reduced the tax on all competitive forms of fastening. That is palpably unfair, and I cannot think that the Chancellor really intended to do this.
One of my hon. Friends was saying that there was no rational argument for this treatment of buttons, and suggested that the Chancellor himself, being a bachelor, had such difficulty with buttons that he had such a feeling of resentment which could be expressed only by this punitive rate of tax. I notice that almost every other form of fastening which was highly taxed has had the tax reduced, but nevertheless buttons, cuff links and studs remain at a punitive rate, and I can only think that there must a psychological explanation for this. The Chancellor obviously loses his buttons, loses his studs and cannot manage his cuff links, and

has expressed that in his first Budget by taxing them at an exorbitant rate.
The indignation of the manufacturers of buttons is genuine and the tax seems completely unfair discrimination against an industry, small but very important in its own localities. We cannot see any rhyme or reason for the discrimination. Zip fasteners and buttons are strongly competing articles, and I seriously suggest that the Chancellor reconsiders the matter.
The other matters which we have been permitted by courtesy of the Chair to discuss under the heading "haberdashery" are wallpaper, garden furniture and trophy cups. The logic behind that is that in each case it is proposed that the tax should be reduced by similar amounts. Here again some very cogent arguments have been adduced. I was especially impressed by the speech of my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins), who pointed out how ridiculous it is that certain articles of furniture of the most utilitarian nature should be taxed at 15 per cent. whereas the most luxurious article of furniture within the four walls of a house is charged at only 5 per cent.
My hon. Friend pointed out that there is hardly any justification for Group 16 and that if the Chancellor is concerned to tidy up Purchase Tax, this would have been a very obvious group to have eliminated altogether. There has been some little rearrangement in the Second Schedule which on the whole has been sensible, but this seems to be an opportunity so far missed. I hope the Chancellor will be able to carry the reorganisation of the Second Schedule a little further before we reach it.
My hon. Friend the Member for Blackburn made a very strong case about wallpaper and other hon. Members have mentioned the subject. It is true that there are some things in this group to which a little tax will not do any harm, things such as cutlet and ham frills and pie-dish collars. I do not think that we should worry ourselves unduly about them, but when we come to the serious matter of wallpaper, some encouragement should be given. Wallpaper is a household necessity, and I cannot see any justification for keeping this relatively high level of tax on wallpaper.
If the Chancellor does not wish to deal with the entire group, and if he wishes to keep the somewhat higher rate on the other types of paper, display paper and so on, we would at least be prepared to hear arguments on that issue, but we strongly feel that wallpaper is something which affects household comfort and cheerfulness. We believe that people should be encouraged to keep their houses in a good state of decoration and that wallpaper is not a suitable subject for tax.
I will not add to the very eloquent pleas on a not unimportant Amendment about trophy cups. My hon. Friends have given good reasons why at least some consideration should be given to that subject. Without more ado, I hope that the Chancellor or the Financial Secretary will tell us that the Government have listened to our arguments and are prepared to give us an assurance that what we have suggested will be accepted. Otherwise, we shall feel obliged to express our opinions in the Division Lobby.

9.30 p.m.

Mr. Charles Royle: In just a few sentences I want to support what has been said about wallpaper, with perhaps a different argument, and from a different point of view from that which has so far been expressed. My hon. Friend the Member for Blackburn (Mrs. Castle) has very ably dealt with the technical and economic side of the matter, as it affects the industry, and I hope that her arguments will affect the Treasury to such an extent that it will be prepared to give way.
There is another argument. I represent a working-class, industrial constituency, as do many of my hon. Friends, and we are very much concerned with the housing situation. When we have been discussing housing matters arguments have been advanced from the Treasury Bench about the need for both landlords and tenants to keep in proper repair houses which will have to be occupied for many more years before they are replaced. Right hon. Gentlemen opposite have urged that landlords and tenants should do something to preserve them and maintain them as reasonable dwellings. I suggest that to some of the occupiers of these poorer dwellings the question of wallpaper is vital. It is not a question of distemper, paint or enamel. Something needs to be covered up, and

the only thing that can properly cover it up is wallpaper. There may be objections to removing Purchase Tax from the more expensive types of wallpaper, but I suggest that the Chancellor should examine the possibility of taking it off the less expensive kinds.
It must have been in the Budget of 1946, when wallpaper was carrying a very heavy tax, that I made this sort of appeal to my right hon. Friend the Member for Bishop Auckland (Mr. Dalton). He saw the point, and reduced the tax, and it has continued at that level until the present time. I am grateful to the Chancellor for the reduction that he is now making, in line with other commodities, but I suggest that he should make wallpaper free of Purchase Tax, so that the occupants of some of the very poorer types of house may have an opportunity as cheaply as possible to cover up some of the cracks and damage caused by time.
I am sorry to see that the Financial Secretary to the Treasury has his arm in a sling. I dread to think what condition he will be in by Wednesday night if we keep discussing Purchase Tax. If he will start off with his right hon. Friend by giving way on this group of Amendments I can assure him that we shall do our best to see that he is in a much better physical state by Wednesday.

Mr. Amory: I am very sorry for my hon. and learned Friend—but it is only his left wing which is affected.

Mr. Simon: The hon. Member for Oldbury and Halesowen (Mr. Moyle) said that unless the present Government remitted all taxation they would have no chance of winning the next Election. Laudable as that object is, now that my right hon. Friend has returned to the Chamber I certainly could not sacrifice, on his behalf, the revenue involved in accepting this series of Amendments, but I hope to satisfy the Committee that the structure of the tax which is embodied in the Schedule is a reasonable one.
I will deal first with haberdashery. The fundamental fallacy lying at the basis of the very entertaining speech of the hon. Member for Walthamstow, West (Mr. Redhead) is to imagine that haberdashery consists of one type of goods. In point of fact, the haberdashers' shops sell three quite distinct types, and this is now recognised in the reconstruction of the


Schedule. Haberdashery ranges from such things as ties, belts and muffs to shoe-trees and coat hangers—hard haberdashery. Some haberdashery has affinities with clothing, and that has been reduced to 5 per cent., to fit in with the clothing taxation under the Purchase Tax Schedule. The second class has an affinity with domestic hardware, things like shoe-trees and coat hangers, and therefore they have been put in the 15 per cent. class. The third type merges into imitation jewellery and is therefore taxed now at 30 per cent.
I do not think that there is any doubt about the first lot—the Committee will not want me to go further into that, because those articles are at the 5 per cent. rate which is recommended in this Amendment—except to say that we have managed to correct a great number of anomalies in the reconstruction of this part of the tax. For example, ties were taxed at 30 per cent., as earlier my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) pointed out, men's collars at 5 per cent., suspenders at 30 per cent. but braces at 5 per cent., cummerbunds, for some reason, at 30 per cent. but waistcoats at 5 per cent. All these articles are now taxed at 5 per cent.
The second class of haberdashery goods is quite a distinct class of goods. These are the hard haberdashery, like the darners which the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) mentioned, wool-winders and coat hangers, shoe-trees and buttonhooks. They are quite different types of goods. They are not worn on the person at all and in many cases, indeed, there is an alternative charge for them as domestic hardware.
I am bound to point out that if the Amendment of the hon. Gentleman the Member for Oldbury and Halesowen were accepted, there would be very little loss of revenue because, in fact, these goods would be caught by the Schedule in so far as it applies to domestic hardware.

Mr. Redhead: Am I right in saying that if one has a garment which may be simply smothered in buttons or sequins the charge will be the charge appropriate to the tax on the garment, namely 5 per cent., whereas if a button is purchased as a replacement, as a single item, the tax will be 30 per cent.? If that is so will

the hon. and learned Gentleman explain the logic of it?

Mr. Simon: That is perfectly correct. I have not yet come to buttons. I am coming to them next. I wanted first to satisfy the Committee that it would be illogical to tax articles of hard haberdashery in the same way as clothing, to put them into the clothing group simply because they are traditionally sold in haberdashers' shops.
I now come to the third class where haberdashery merges into articles of artificial jewellery and I shall also deal in that connection with buttons. There are two main groups. There are such things as beads, sequins, buttons, cufflinks, studs, tiepins, tie retainers, scarf rings, scarf holders and similar articles. One has only to enumerate them to see how they merge into the sphere of artificial jewellery. The hon. Lady the Member for Flint, East (Mrs. White) will forgive me a personal reference, but one has only to glance at her charming appearance to see that buttons are very different things from "common articles," as the hon. Member for Oldbury and Halesowen defined them. Of course, the sort of buttons that men wear are common articles but the buttons worn by the hon. Lady the Member for Flint, East, and by other hon. Ladies, become articles of artificial jewellery, and, if I may say so, very attractive they are. It would be quite wrong not to treat them as such, and, in fact, we should get the grossest of anomalies if we failed to treat them in that way.

Mr. Julian Snow: I am intrigued by this definition of haberdashery. May I ask who defines haberdashery in this way, because what the hon. and learned Gentleman is saying will make the old gentlemen of Oxford Street turn in their graves.

Mr. Simon: All I know is that this particular Schedule of the Purchase Tax, which, I imagine was agreed with the trade, has from the inception been headed "haberdashery". I think I am right in saying that all these articles are sold by haberdashers' shops and for that reason they are called haberdashery. I hope I have convinced the Committee that straight away, we have three quite separate classes of goods.

Mr. Moyle: Having regard to the explanation which he has just given, may I ask the Financial Secretary how he accounts for something which has been put to me by the trade? In March, 1938, hooks and eyes, press studs, snap fasteners, slide fasteners, zip fasteners and buttons were in the same category and attracted Purchase Tax at 30 per cent. How is it that in the present Finance Bill all the fasteners are relieved of 25 per cent. of the tax but the buttons still attract 30 per cent.?

Mr. Simon: If the hon. Gentleman will be patient, he will find that I shall deal with all the points which have been made, including that one.

Mr. Turton: What proportion of buttons manufactured in this country are classified as artificial jewellery?

Mr. Simon: I shall not be able to answer that question categorically, but I think that I shall be able to satisfy my right hon. Friend on the subject.
I have dealt with the first part of the third group of haberdashery, beads, sequins, and so on, and buttons and cufflinks, which obviously merge into artificial jewellery. I do not say that they are all identical but it is impossible to define the borderline. The other group, which is also traditionally haberdashery, includes such things as hairpins, hair grips, hair combs, dress combs, hair slides, and so on, which have affinities with other hairdressing goods and, to some extent, in things like hair slides, with artificial jewellery.

Miss Margaret Herbison: Not like this one that I am holding?

Mr. Simon: Not that, but even with my limited experience I have seen other sorts which are very near to artificial jewellery, and therefore they cannot fit into the 30 per cent. group.
Let me clear up the misconception, which has run through the whole of this debate, that button manufacturers are at a grave disadvantage when selling to the clothing manufacturers compared with the manufactures of snap fasteners, press studs and so on. That is not so, because when the button manufacturer sells to a registered manufacturer, he sells tax-free. Of course that includes the bulk of the sales of ordinary buttons which are not

merging into imitation jewellery. I hope that answers the question of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). I cannot, of course, say what proportion of the button trade is made up of the ordinary buttons used for male or female attire. I can say, however, that by far the greater proportion of the buttons that are produced are sold to the trade and are tax free and, therefore, compete equally with tax-free zips—which are more expensive—and, so far as there is competition, also with press studs.
9.45 p.m.
I see a number of hon. Members waiting to jump on me. I have not quite finished, but perhaps I may give way.

Mr. S. O. Davies: Is not the hon. and learned Gentleman aware that in many cases in the button trade the manufacturer retails a large proportion of the output? I know, for instance, where a little over 50 per cent. is sold directly to retailers. There, this 30 per cent. Purchase Tax will hit the industry badly.

Mr. Redhead: Surely, the distinction that the Financial Secretary is drawing of buttons which merge into the imitation jewellery class, upon which he rests his justification for discriminating in respect of what has hitherto been regarded as haberdashery chargeable at a common rate, is a position which has existed all along. This has not precluded buttons being included, in common with all the other items listed as haberdashery, at one common rate of 30 per cent., while imitation jewellery has been at 60 per cent. Why now discover this great difficulty?

Mr. Simon: In answer, first, to the hon. Member for Walthamstow, West, it is true that so far the soft haberdashery, the hard haberdashery and the imitation jewellery have been lumped together as haberdashery; but this Schedule is a rationalisation of the tax. We are trying to bring some sense into its structure. It is for that reason that this differentiation has now been brought about. In reply to the hon. Member for Merthyr Tydvil (Mr. S. O. Davies), I am not sure—it would be wrong if I pretended to the knowledge—how much of the trade is across the counter retail and how much is to the manufacturer, but I am assured that the bulk of the


trade, as one would expect, is to the manufacturing tailors.
I ask the Committee to consider the sale across the counter to the housewife whose husband has lost a button and who goes in and buys an odd few. She will not buy a zip fastener then, she will not even buy a press stud. She will buy buttons, because she wants buttons, and the tax will not be of more than marginal significance in an infinitesimal proportion of the cases. When we are reconstructing a tax of this nature, I ask the Committee to look at it with a sense of realism.
One other question concerning haberdashery was put to me by the hon. Lady the Member for Stoke-on-Trent, North. It concerned children's reins. I am able to assure the hon. Lady that children's reins are among the articles of haberdashery on which the tax has been reduced from 30 to 5 per cent.

Mrs. Slater: I was asking that they should be included in the bracketed group beneath and so not be chargeable to tax.

Mr. Simon: The hon. Lady is asking for just a bit too much. These are articles of haberdashery. They have been brought down the full amount from 30 to 5 per cent. I hope that the hon. Lady will at least be thankful for that amount, which is quite considerable.
The next issue was wallpaper.

Mr. Osborne: It seems to me that my right hon. Friend is increasing the tax on all buttons because certain undefined female buttons could be used as costume jewellery. What differentiation is there between a male button or a female button? Secondly, what makes a female button either common or decorative, and what is the proportion?

Mr. Simon: In the first place, I did not invent the term "female button". Second, it is not the purpose to increase the tax on buttons at all. It is intended to leave the tax on buttons as it is at the moment. I can say, without giving any undertaking to the Committee at all, and without implying any undertaking, that my right hon. Friend, who was not here during the bulk of this debate, will study the arguments which have been put forward and give them full consideration.
I pass to the subject of wallpaper. This matter was raised by the hon. Lady the Member for Stoke-on-Trent, North, the hon. Lady the Member for Blackburn (Mrs. Castle), the hon. Lady the Member for Flint, East and, finally, the hon. Member for Salford, West (Mr. Royle). I certainly found their appeals very moving. These are matters which relate to the home. I can remember my mother describing the difference she found over her lifetime in the sort of homes to which the hon. Member for Salford, West referred, between fifty years ago when she started her social work and today. I know that the supply of good quality wallpaper within the purses of people of people trying to keep up their homes is a very important matter. It is for that, among other reasons, that my right hon. Friend has reduced the tax on wallpaper in this Budget from 30 per cent. to 15 per cent. At 15 per cent. it fits in naturally with the household conception.
I do not ask the Committee, and particularly I do not ask hon. Members opposite, to accept that conception as something inherently desirable, but that is the present structure of the tax. The standard rate is 30 per cent. and the reduced rates are 15 per cent. and 5 per cent., of which 5 per cent. is particularly on such things as clothing and furniture in the home. The other household requisites are taxed at 15 per cent., and wallpaper fits into that category. It fits in with other articles taxable at the same rate, such as linoleum and carpets.

Mrs. Castle: How does the hon. and learned Gentleman classify paints, varnish and distemper? Are not they in the household category? Yet they are exempt.

Mr. Simon: They are exempt partly for industrial reasons. I am sure the hon. Lady was right when she said that, in spite of the fact that there has been a very much greater tax discrimination in the past than there is now, that has not prevented people from exercising a preference for wallpaper. I believe the reduction in the tax from 30 per cent. to 15 per cent. will enable a number of those who wish to exercise that preference to do so.
I am bound to point out that the Amendment would cost £3 million in revenue, and, as my right hon. Friend pointed out, that is a matter which he is


bound to consider in looking at these Amendments. I repeat that he has gone a long way to meet the perfectly valid points urged movingly by hon. Members and hon. Ladies opposite in reducing the tax from 30 per cent. to 15 per cent.

Mr. Niall MacDermot: When the hon. and learned Member speaks of £3 million, is he referring to the Amendment on haberdashery or to the item of wallpaper?

Mr. Simon: Wallpaper. I pointed out that the haberdashery Amendment will not cost as much as it might appear because the articles are caught by one of the other parts of the Schedule.
I come to the debate on garden furniture, which was dealt with mainly by the hon. Member for Shoreditch and Finsbury (Mr. Collins), who speaks on these matters with considerable authority. He says, "You need only take a table out of the house, cut a hole in it and stick an umbrella in it, and it becomes chargeable at the higher rate of tax as garden furniture." Very effective and entertaining that sounded as he said it, but, frankly, people do not behave in that way. They do not take their domestic table out into the garden and cut a hole in it. The whole point of the differentiation is that by and large garden furniture is distinct from domestic furniture.

Mr. Collins: If the hon. and learned Member rejects my definition, will he tell us what is a garden table, suitable for a garden umbrella, but a table with a hole in the middle?

Mr. Simon: Of course it is a table with a hole in the middle, but it is made as garden furniture, which is quite distinct. The 5 per cent. rate of tax is for the domestic article, for the furniture inside the house. Garden furniture has always been treated separately from domestic and office furniture for Purchase Tax purposes, as far as I know from the inception of the tax. It embraces a very much wider range of articles. If I may take the hon. Member back to his courting youth, I would remind him that it includes such things as hammocks, pergolas, rustic arches, plant boxes and so on, all in a quite distinct category from the category of domestic furniture.

Mr. Hector Hughes: Where in the Bill, or anywhere, is there

a definition of garden furniture? Where is there anything to distinguish an indoor domestic table from a table for use in the garden?

Mr. R. T. Paget: Supposing one buys the table and the umbrella separately, is one then all right?

Mr. Simon: I should not like to advise the hon. and learned Member for Northampton (Mr. Paget) on such a matter. If the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) will look in page 44 of Notice No. 78 he will find the various definitions of garden furniture.

Mr. Osborne: He has only just come into the Chamber.

Mr. Simon: The Bill reduces the tax on garden furniture from 30 per cent. to 15 per cent. and it goes a good deal of the way to meet the hon. Member's argument. Again, I ask the Committee to say that this is fixed at a reasonable rate.
10.0 p.m.
The tax on trophy bowls has been reduced from 30 per cent. to 15 per cent. I quite appreciate the point made by the hon. Lady the Member for Stoke-on-Trent, North and the hon. Lady the Member for Blackburn about the part which these articles play in stimulating proper rivalry in schools, clubs and so forth; but that is not the only use for these articles. Again, one must look at the matter as a whole. The reform of the tax, among other things, has followed one of the principles quite rightly, I think, laid down by the hon. Member for Shoreditch and Finsbury, namely, that articles made of different materials but serving the same purpose should not be differentiated as to tax. For that reason, the tax on gold and silver bowls has been brought down to 15 per cent.
Flower vases and bowls which are used for holding flowers on the table are taxed at 15 per cent. as tableware. How can one really distinguish a trophy bowl from a rose bowl? Quite often, in fact, a rose bowl is a trophy bowl. For that reason, they are quite correctly, in my respectful submission, put into the 15 per cent. category, where they fit conveniently with other articles with which they might compete and where they already enjoy a reduction from 30 to 15 per cent.
I hope that I have answered the various points made in the debate. For the


reasons I have given, I could not advise the Committee to accept any of the Amendments.

Question put, That "Group 5 (haberdashery)" stand part of the Schedule:—

The Committee divided: Ayes 198, Noes 164.

Division No. 130.]
AYES
[10.2 p.m.


Agnew, Sir Peter
Goodhart, Philip
Mott-Radclyffe, Sir Charles


Aitken, W. T.
Gough, C. F. H.
Nabarro, G. D. N.


Amery, Julian (Preston, N.)
Graham, Sir Fergus
Nairn, D. L. S.


Amory, Rt. Hn. Heathcoat (Tiverton)
Green, A.
Neave, Airey


Arbuthnot, John
Grimston, Hon. John (St. Albans)
Nicholls, Harmar


Armstrong, C. W.
Grosvenor, Lt.·Col. R. G.
Nicholson, N. (B'n'm'th, E. &amp; Ch'oh)


Atkins, H. E.
Hall, John (Wycombe)
Nugent, G. R. H.


Baldock, Lt.-Cmdr. J. M.
Harris, Frederic (Croydon, N. W.)
Oakshott, H. D.


Baldwin, A. E.
Harris, Reader (Heston)
Orr, Capt. L. P. S.


Balniel, Lord
Harrison, Col. J. H. (Eye)
Osborne, C.


Barlow, Sir John
Harvey, Sir Arthur Vere (Macclesf'd)
Page, R. G.


Barter, John
Harvey, John (Walthamstow, E.)
Pannell, N. A. (Kirkdale)


Bell, Philip (Bolton, E.)
Heald, Rt. Hon. Sir Lionel
Partridge, E.


Bennett, Dr. Reginald
Heath, Rt. Hon. E. R. G.
Peel, W. J.


Bevins, J. R. (Toxteth)
Hesketh, R. F.
Peyton, J. W. W.


Bidgood, J. C.
Hicks-Beach, Maj. W. W.
Pike, Miss Mervyn


Biggs-Davison, J. A.
Hill, Rt. Hon. Charles (Luton)
Pilkington, Capt. R. A.


Bingham, R. M.
Hill, Mrs. E. (Wythenshawe)
Pitt, Miss E. M.


Bishop, F. P.
Hinchingbrooke, Viscount
Price, David (Eastleigh)


Body, R. F.
Hirst, Geoffrey
Price, Henry (Lewisham, W.)


Bossom, Sir Alfred
Hobson, John (Warwick &amp; Leam'gt'n)
Prior-Palmer, Brig. O. L.


Boyle, Sir Edward
Holland-Martin, C. J.
Profumo, J. D.


Braine, B. R.
Hornby, R. P.
Rawlinson, Peter


Braithwaite, Sir Albert (Harrow, W.)
Hornsby-Smith, Miss M. P.
Redmayne, M.


Bromley-Davenport, Lt.-Col. W. H.
Horobin, Sir Ian
Remnant, Hon. P.


Browne, J. Nixon (Craigton)
Howard, Gerald (Cambridgeshire)
Renton, D. L. M.


Bryan, P.
Howard, Hon. Greville (St. Ives)
Ridsdale, J. E.


Burden, F. F. A.
Howard, John (Test)
Rippon, A. G. F.


Butcher, Sir Herbert
Hughes-Young, M. H. C.
Roberts, Sir Peter (Heeley)


Butler, Rt. Hn. R. A. (Saffron Walden)
Hurd, A. R.
Roper, Sir Harold


Carr, Robert
Hutchison, Michael Clark (E'b'gh, S.)
Ropner, Col. Sir Leonard


Channon, Sir Henry

Russell, R. S.


Chichester-Clark, R.
Hyde, Montgomery
Scott-Miller, Cmdr. R.


Clarke, Brig. Terence (Portsmth, W.)
Hylton-Foster, Rt. Hon. Sir Harry
Sharples, R. C.


Cole, Norman
Irvine, Bryant Godman (Rye)
Shepherd, William


Conant, Maj. Sir Roger
Jennings, J. C. (Burton)
Simon, J. E. S. (Middlesbrough, W.)


Cooke, Robert
Johnson, Dr. Donald (Carlisle)
Smithers, Peter (Winchester)


Cooper-Key, E. M.
Johnson, Eric (Blackley)
Spearman, Sir Alexander


Cordeaux, Lt.-Col. J. K.
Joseph, Sir Keith
Speir, R. M.


Corfield, Capt. F. V.
Keegan, D.
Stanley, Capt. Hon. Richard


Craddock, Beresford (Spelthorne)
Kerr, Sir Hamilton
Steward, Sir William (Woolwich. W.)


Crosthwaite-Eyre, Col. O. E.
Kimball, M.
Storey, S.


Crowder, Sir John (Finchley)
Kirk, P. M.
Stuart, Rt. Hon. James (Moray)


Crowder, Petre (Ruislip—Northwood)
Lancaster, Col. C. G.
Studholme, Sir Henry


Cunningham, Knox
Leather, E. H. C.
Taylor, Sir Charles (Eastbourne)


Currie, G. B. H.
Leburn, W. G.
Taylor, William (Bradford, N.)


Dance, J. C. G.
Legge-Bourke, Maj. E. A. H.
Teeling, W.


Davidson, Viscountess
Legh, Hon. Peter (Petersfield)
Temple, John M.


D'Avigdor-Goldsmid, Sir Henry
Lindsay, Hon. James (Devon, N.)
Thomas, Leslie (Canterbury)


Deedes, W. F.
Low, Rt. Hon. Sir Toby
Thorneycroft, Rt. Hon. P.


Digby, Simon Wingfield
Lucas, Sir Jocelyn (Portsmouth, S.)
Thornton-Kemsley, Sir Colin


Donaldson, Cmdr. C. E. McA.
Lucas, P. B. (Brentford &amp; Chiswick)



Doughty, C. J. A.
McAdden, S. J.
Tilney, John (Wavertree)


du Cann, E. D. L.
Macdonald, Sir Peter
Turton, Rt. Hon. R. H.


Dugdale, Rt. Hn. Sir T. (Richmond)
McKibbin, Alan
Vane, W. M. F.


Eden, J. B. (Bournemouth, West)
Mackie, J. H. (Galloway)
Wall, Patrick


Elliott, R. W. (Ne'castle upon Tyne, N.)
McLaughlin, Mrs. P.
Ward, Rt. Hon. G. R. (Worcester)


Emmet, Hon. Mrs. Evelyn
Macleod, Rt. Hn. Iain (Enfield, W.)
Ward, Dame Irene (Tynemouth)


Errington, Sir Eric
Maddan, Martin
Whitelaw, W. S. I.


Fell, A.
Maitland, Cdr. J. F. W. (Horncastle)
Williams, Paul (Sunderland, S.)


Finlay, Graeme
Marlowe, A. A. H.
Wilson, Geoffrey (Truro)


Fisher, Nigel
Marshall, Douglas
Wood, Hon. R.


Fletcher-Cooke, C.
Mathew, R.
Woollam, John Victor


Fraser, Sir Ian (M'cmbe &amp; Lonsdale)
Maudling, Rt. Hon. R.
Yates, William (The Wrekin)


Freeth, Denzil
Mawby, R. L.



Gammans, Lady
Maydon, Lt.-Cmdr. S. L. C.
TELLERS FOR THE AYES:


Gibson-Watt, D.
Molson, Rt. Hon. Hugh
Mr. Wills and Mr. Brooman-White


Glover, D.
Moore, Sir Thomas





NOES


Ainsley, J. W.
Bacon, Miss Alice
Blackburn, F.


Allaun, Frank (Salford, E.)
Baird, J.
Boardman, H.


Allen, Arthur (Bosworth)
Benson, Sir George
Bowden, H. W. (Leicester, S. W.)


Allen, Scholefield (Crewe)
Beswick, Frank
Bowen, E. R. (Cardigan)




Bowles, F. G.
Hughes, Cledwyn (Anglesey)
Peart, T. F.


Braddock, Mrs. Elizabeth
Hughes, Hector (Aberdeen, N.)
Pentland, N.


Brown, Thomas (Ince)
Hunter, A. E.
Popplewell, E.


Burke, W. A.
Hynd, H. (Accrington)
Prentice, R. E.


Burton, Miss F. E.
Hynd, J. B. (Attercliffe)
Price, J. T. (Westhoughton)


Castle, Mrs. B. A.
Irvine, A. J. (Edge Hill)
Probert, A. R.


Champion, A. J.
Irving, Sydney (Dartford)
Pursey, Cmdr. H.


Chapman, W. D.
Isaacs, Rt. Hon. G. A.
Randall, H. E.


Chetwynd, G. R.
Jeger, George (Goole)
Rankin, John


Coldrick, W.
Jeger, Mrs. Lena (Holbn &amp; St. Pncs, S.)
Redhead, E. C.


Collick, P. H. (Birkenhead)
Jenkins, Roy (Stechford)
Reeves, J.


Collins, V. J. (Shoreditch &amp; Finsbury)
Jones, Rt. Hn. A. Creech (Wakefield)
Reynolds, G.


Corbet, Mrs. Freda
Jones, David (The Hartlepools)
Roberts, Goronwy (Caernarvon)


Craddock, George (Bradford, S.)
Jones, Elwyn (W. Ham, S.)
Robinson, Kenneth (St. Pancras, N.)


Cronin, J. D.
Jones, J. Idwal (Wrexham)
Rogers, George (Kensington, N.)


Crossman, R. H. S.
Jones, T. W. (Merioneth)
Ross, William


Dalton, Rt. Hon. H.
King, Dr. H. M.
Royle, C.


Davies, Stephen (Merthyr)
Lawson, G. M.
Short, E. W.


Deer, G.
Ledger, R. J.
Silverman, Julius (Aston)


Dodds, N. N.
Lee, Frederick (Newton)
Slater, Mrs. H. (Stoke, N.)


Dugdale, Rt. Hn. John (W. Brmwch)
Lindgren, G. S.
Snow, J. W.


Ede, Rt. Hon. J. C.
Mabon, Dr. J. Dickson
Sorensen, R. W.


Edelman, M.
McAlister, Mrs. Mary
Sparks, J. A.


Edwards, Rt. Hon. John (Brighouse)
MacColl, J. E.
Steele, T.


Edwards, W. J. (Stepney)
MacDermot, Niall
Stones, W. (Consett)


Evans, Albert (Islington, S. W.)
McGhee, H. G.
Stross, Dr. Barnett (Stoke-on-Trent, C.)


Evans, Edward (Lowestoft)
McGovern, J.
Summerskill, Rt. Hon. E.


Fernyhough, E.
McInnes, J.
Sylvester, G. O.


Finch, H. J.
McKay, John (Wallsend)
Taylor, Bernard (Mansfield)


Foot, D. M.
Mahon, Simon
Taylor, John (West Lothian)


Fraser, Thomas (Hamilton)
Mallalieu, J. P. W. (Huddersfd, E.)
Thomas, Iorwerth (Rhondda, W.)


Gaitskell, Rt. Hon. H. T. N.
Mann, Mrs. Jean
Tomney, F.


George, Lady Megan Lloyd (Car'then)
Marquand, Rt. Hon. H. A.
Viant, S. P.


Gibson, C. W.
Mason, Roy
Wade, D. W.


Greenwood, Anthony
Mayhew, C. P.
Weitzman, D.


Grenfell, Rt. Hon. D. R.
Mikardo, Ian
West, D. G.


Grey, C. F.
Mitchison, G. R.
Wheeldon, W. E.


Griffiths, David (Rother Valley)
Monslow, W.
White, Mrs. Eirene (E. Flint)


Griffiths, Rt. Hon. James (Llanelly)
Moody, A. S.
Wilcock, Group Capt. C. A. B.


Hall, Rt. Hn. Glenvil (Colne Valley)
Moyle, A.
Willey, Frederick


Hamilton, W. W.
Mulley, F. W.
Williams, Rev. Llywelyn (Ab'tillery)


Hannan, W.
Neal, Harold (Bolsover)
Williams, Rt. Hon. T. (Don Valley)


Harrison, J. (Nottingham, N.)
Noel-Baker, Rt. Hon. P. (Derby, S.)
Willis, Eustace (Edinburgh, E.)


Hastings, S.
Oliver, G. H.
Wilson, Rt. Hon. Harold (Huyton)


Hayman, F. H.
Oram, A. E.
Winterbottom, Richard


Henderson, Rt. Hn. A. (Rwly Regis)
Orbach, M.
Woof, R. E.


Herbison, Miss M.
Owen, W. J.
Yates, V. (Ladywood)


Hewitson, Capt. M.
Paget, R. T.
Zilliacus, K.


Hobson, C. R. (Keighley)
Paling, Rt. Hon. W. (Dearne Valley)



Holman, P.
Palmer, A. M. F.
TELLERS FOR THE NOES:


Holt, A. F.
Pannell, Charles (Leeds, W.)
Mr. Pearson and Mr. Simmons.


Hubbard, T. F.
Parker, J.

Mr. Collins: I beg to move, in page 29, line 14, to leave out from "furniture)" to the second "or" in line 15.

The Chairman: We may discuss with this Amendment the hon. Member's Amendment, in page 29, line 35, at the end to insert:
(c) in the case of articles which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made mainly but not wholly of cane or wicker, where the rate under Group 23 would be so reduced to 30 per cent., it shall instead be reduced to 15 per cent.
and the Amendment in the name of the hon. Member for Dover (Mr. Arbuthnot) in page 31, line 2, at end insert:
5. Rush baskets previously chargeable under Group 23 (a) at 60 per cent. shall be chargeable at 15 per cent.

Mr. Collins: As you have indicated, Sir Charles, this Amendment stands with

others on the same subject, and as the Committee will realise, if it were moved in isolation it would have the effect of retaining the higher rate of tax instead of the 15 per cent. reduction which the Chancellor has arranged. That is the very reverse of our intention, so I hope the Chancellor will realise that what we have in mind is the exemption of shopping baskets from Purchase Tax and all the other baskets of a domestic and personal character which are covered in this group; in other words, the return to the special position which shopping baskets enjoyed, and have enjoyed since 1955.
Although the same general case exists for the exemption from tax of baskets of a domestic and personal character as exists for all those in Group 23, the position is somewhat complicated, and it may be helpful if I explain and I hope hon. Members will bear with me, because


although I know it is getting late and we are anxious to go home, this is a matter of very considerable importance to a number of people whom everybody in the Committee, I know, is anxious to help.
Tax of 30 per cent. was imposed in 1955 on all the items in this group. In Committee on the Finance Bill then an Amendment was accepted which exempted shopping baskets from tax irrespective of the materials of which they were made. I would ask the Chancellor to bear that in mind. The present Bill cancels that exemption so that shopping baskets are subject to the same tax provisions as the remainder of the group, namely, that articles wholly of cane or wicker are taxed at 15 per cent. but those including any other materials are taxed at 30 per cent. The previously exempted shopping baskets have, therefore, gone up from nil to 15 per cent. or 30 per cent. according to the materials of which they are made.
10.15 p.m.
It may well astonish the Committee, at a time when the Chancellor has found it possible to reduce Purchase Tax by £41 million in a full year, to find that he has suddenly decided to impose this severe and crippling tax on the humble but useful shopping basket, and to do it in such a way as to involve indefensible discrimination. I am sure that when I have explained the position, the right hon. Gentleman will agree that the discrimination he has allowed, perhaps inadvertently, is indefensible.
I have searched for reasons for this utterly unreasonable action, and I have been given two possible explanations. The first, which I find difficult to accept, is that because some firms in the ladies' handbag trade have been importing small ladies' handbags made of cane from Hong Kong and have been selling them as shopping bags or baskets free of tax honest traders have objected. The Customs and Excise seem to have decided that if shopping baskets and ladies' handbags made of cane are chargeable at the same rate there will be no loophole left. If this is the explanation, I am sure the Committee will reject it, because it is the business of the Customs officers to see that the law is carried out, and it is indefensible that blind and disabled persons should become unemployed because of a racket in a

different industry and because Customs officers are unable to prevent a few traders from acting dishonestly.
The second and equally unacceptable explanation is that the Chancellor, having made a welcome decision to reduce tax on certain domestic baskets, thought it would remove an anomaly if he re-imposed the tax on shopping baskets and brought them into the same group. If this is the explanation, he has signally failed in his objective, since in removing a possible anomaly, which the House fully approved in 1955, he has created a lot of new ones. The right hon. Gentleman told us in an earlier debate that he refused to remove anomalies because he can only do so in some cases by increasing taxation. In this case he has, perhaps inadvertently, created a whole group of new anomalies of which, for the sake of brevity I will mention only two or three.
Of recent years, as the Committee is aware, shopping baskets on wheels—those with a walking-stick handle—have become popular with tired housewives and are becoming increasingly popular with the growth in supermarkets. These are made of cane and wicker and will be subject now to 15 per cent. tax although they were formerly tax-free. The Customs and Excise have always agreed that if exactly the same basket is made in unpeeled brown willow with the bark on, it is a garden weeding basket and therefore free of tax, whereas the peeled one with the bark off is a shopping basket on wheels and will now be taxable. I know there will be a big increase in the sale of garden weeding baskets, but people, particularly in blind workshops, ought not to be driven to this expedient. That is anomaly number one.
Anomaly number two is that the 15 per cent. tax on shopping baskets only applies to those made wholly from cane and willow. People like a little bit of decoration, a little colour, in shopping baskets, and this is often done by introducing a few strands of coloured plastic material or coloured seagrass or coloured raffia. Any such basket is now taxable at 30 per cent., although it was previously exempt. Only a few minutes ago the Financial Secretary, in replying to a previous debate, said he agreed entirely with my submission that when a basket was the same basket or an article was the


same article, and there was only a difference in the type of material, they ought to be charged at the same rate of tax.
I would like the Chancellor to see how utterly absurd this particular anomaly is. I have in my hand two small pieces of material which are indistinguishable from that distance or from this distance. One is plastic, the other is cane. One is subject to tax at 15 per cent., the other is subject to tax at 30 per cent. I will give them to my right hon. Friend the Member for Warrington (Dr. Summerskill) to pass across to the Chancellor since he may like to see them. So if the right hon. Gentleman has been trying to remove anomalies, this is one which I am certain he cannot defend. It seems an extraordinary price to pay for a little colour, especially when the plastic is made here and the cane has to be imported from abroad. The effect of the anomaly and of the 30 per cent. tax is to stop the production and sale of this kind of basket altogether, and these were the ones for which there was the most demand.
The third anomaly is that a plastic and cane bread basket is now taxed at 15 per cent.—it has been reduced from 30 per cent. If a handle is put on it and it becomes a shopping basket, it will pay 30 per cent., when formerly exempt, if there happens to be a little colour. I do not believe that the Chancellor would have imposed the tax if he had known that it would create such absurdities and injustices. Imagine doubling the tax on an article because one puts a handle on it!
There is one other anomaly, and perhaps the craziest one of all. When shopping baskets were exempted from the tax in 1955, the exemption did not apply to baskets with lids or which were supplied with any means of closing them. They still stood at 30 per cent., when the whole generality of shopping baskets was exempt. Now the tax has been reduced to 15 per cent., but, of course, shopping baskets, formerly exempt, are now charged at 30 per cent. if they have a little bit of colour in them.
I ask the Chancellor seriously, to consider this matter. I have mentioned only four of the new anomalies created, every one of which is utterly indefensible. I do not believe that there is a single

hon. Member of this Committee who could go into the Lobby honestly to suggest that these things are justified. I do not think anything could be more crazy or more calculated to drive people to despair.
I have mentioned these things because the Chancellor, in the other changes he has made, has moved towards the policy of taxing articles according to their construction and use, and not according to the nature of the materials used. His action with shopping baskets is completely opposite. My main appeal to him to cancel this tax and to restore the exemption previously enjoyed by shopping baskets does not depend on absurdities. This Amendment and this appeal are not funny, and this matter is not funny to a lot of people who are anxiously awaiting the result of the debate on this Amendment and who have been wondering why I did not raise this matter at a previous stage of the Budget debate. I have not been able to do so, and I therefore make this appeal tonight, and I am confident that it will not fall on deaf ears.
The real case for the cancellation of this tax is the fact that the making of these baskets provides employment for a large number of blind and disabled people. I have been connected with them all my life, and I should like to quote from letters which I have had sent to me from workshops in the constituencies of different hon. Members on both sides of the Committee. I hope they will not think that I am doing anything which is not customary in this House. I am not poaching on their preserves, but I do want to mention some of the messages which I have received.
The Committee will recall that in 1955 the present Leader of the House, then Chancellor of the Exchequer, for the first time imposed a tax of 30 per cent. on a wide range of household goods. This list included shopping baskets and brushes, and almost every item in it was strongly opposed from these benches. For reasons which he thought good at the time, the then Chancellor resisted every Amendment from this side of the Committee except two, concerning shopping baskets and brushes, both of which he accepted. I did not even have to move those Amendments myself, because the right hon. Gentleman had put down his own Amendments, which the Committee


accepted. The right hon. Gentleman then made it perfectly clear that he was asking the Committee to amend the Finance Bill because he was convinced that the tax would have a grave effect on the employment of blind and disabled workers.
Everyone in the Committee knows that these people obtain their skill painfully and bravely. It takes much longer for them to acquire their skill than other people. They cannot be easily transferred to other forms of employment. There are no other forms of training available to them, or other forms of employment suitable for them. It is useless to say that, if somebody is out of a job, we want mobility of labour so that they can go into some other industry. These people cannot go into other industries. The same arguments that were accepted by the Leader of the House in 1955 apply today with even greater force, because foreign competition has made it even more difficult to find sufficient work, and the Chancellor, and especially the Financial Secretary, are fully aware that the problem of finding work for the disabled has now become more difficult. Even now he is considering proposals which I and my colleagues have made in other directions to increase the supply of work.
In those circumstances, how utterly absurd and how utterly cruel it is to take away the work which they already have. It does not make sense. We all deplore the fact that unemployment generally is steadily increasing, but it is far worse for a blind man to sit with idle hands. That is what is happening now, and will happen to a far greater degree unless we alter the present proposals.
The taxpayers willingly pay £½ million every year in augmentation to blind workers in order that they may have a reasonable wage and be kept in full and useful employment. Is this work to be taken from them for the sake of perhaps only £10,000 in tax? The Chancellor rightly said that the purpose of Purchase Tax is revenue. I fully agree, but this revenue will be far too dearly bought, because it will cost us another £100,000 in increased augmentation to make up wages when these blind people are out of work.
The Committee knows that I speak with knowledge of the subject of blind workshops. Blind workshops have been

stunned and are at a loss to know the extent of this new burden which is to be placed upon them. Immediately after the Budget, I had a large number of letters from all parts of the country. One letter came from the Royal Institution for the Blind, Sunderland, and said:
We would be most grateful if you would look into the question of Purchase Tax on 'shopping baskets on wheels'. We are told locally that these are now liable to 15 per cent. under the Budget and are also informed that garden weeding baskets, a similar basket, are tax free. It is most unfortunate if they are in fact liable to tax, as we now have a very nice little business growing for this work and it is most suitable for our blind employees.
A letter from the Workshops for the Adult Blind, Newcastle, which was typed in Braille by a blind employee, says:
I was extremely disappointed to learn that the Chancellor of the Exchequer had decided to reimpose a tax of 15 per cent. on shopping baskets. There has been unemployment in our basket department for some little time, and this latest setback is hardly likely to improve trade.
The unemployment mentioned has been such that they have worked one week and have not worked the next. That was before the Budget. The language is quite restrained.
The Norwich Institution for the Blind said:
We make a considerable number of shopping baskets at this Institution, and I am fairly certain this applies elsewhere, and undoubtedly it will have an effect on sales and, goodness knows, we are having enough difficulty at the present time to find full employment for our blind workers particularly in the basket trade. In March we had four weeks on short-time, i.e., a four-day week, and the decision of the Chancellor yesterday"—
this letter was written the day after the Budget—
to withdraw the exemption which we have enjoyed would seem to be very wrong indeed.
Another letter came from a store in Newcastle and said:
I consider that the current Budget proposals to reimpose Purchase Tax on shopping baskets is a gross betrayal of the spirit of the concession given by Mr. Butler. As a result of such a concession, many institutions and workshops for the blind laid themselves out to cater for the home market. I have specialised in the sale of blind-made shoppers, and I have already found that as a result of customers' resistance to taxed baskets, I shall be obliged to discontinue buying the better quality baskets, thereby causing further unemployment among blind operatives.


10.30 p.m.
It must be borne in mind that these conditions do not apply only in workshops for the blind. Most ordinary commercial firms in the basket industry employ a very high percentage of disabled workers—a far higher percentage than any other industry. For example, in the village of Mawdesley in Lancashire, and around Wigan, there are many small firms with a total of about 600 workers, a large percentage of whom suffer from various disabilities; some have missing limbs, others are blind, deaf and dumb, or mentally retarded, some are people who have come out of tuberculosis sanatoria, and some are cripples. In most cases basket making is the only possible occupation open to them, unless they have a further lengthy period of training in another suitable handicraft—and it is idle to pretend that they would have this opportunity.
This community is almost exclusively engaged in making shopping baskets, and it has been successful in meeting the threat of foreign competition, by finding new outlets for its goods. For example, many food firms order large quantities of suitable containers for the Christmas trade. They have been able to get these orders, but immediately this tax was put on they lost the chance of those orders. There has been a standstill on them, and if the tax is not removed they will be out of work. In addition to those who actually go to the factories there are others who cannot attend because of their infirmities, and they are employed part-time. The materials are taken to their homes.
The fact that this work has been made available to them has in many cases brought about a miraculous improvement in their health and happiness. Here is just one more extract, from a letter written by an individual whom I know to be a hard-headed but soft-hearted Lancastrian. He says:
As you well know, the small basket-making firms are ceasing to exist—another one finishes this week. It would seem that the Government wishes to finish us off altogether. Pre-war my firm made a thousand dozen a week, today not more than 80 dozen. One might say, 'Why worry?', but any employer of labour should and must consider his workers. There can be nothing more soul-destroying for a good worker than to have to go on the dole, especially when you consider that most of our people are disabled. I expect you already know that trade in shopping baskets has come to a full stop. Our stocks are piling up. I shall have

to start discharging workers, but have no desire to cause hardship to some who can never get another job. One even comes in a wheel-chair because he is paralysed in the back and both legs. Will you advise me whether it is worth while holding on a little longer, or should I start dismissing staff at once?
I asked him at least to wait until we had taken the first three days of the Committee stage of the Bill, when I thought we could get an answer from the Chancellor. I would ask him tonight: Why let this debate go on? Why not accept the Amendment? I am sure hon. Members on both sides of the Committee will want to join with me in pleading that the same exemption which the Committee rightly gave these people in 1955—which I honestly believe has only inadvertently been taken away from them—should be restored.
Let the Chancellor take the same action as he took over protective clothing, and make this announcement tonight. I know beyond any peradventure that he must remove the discrimination between the 50 per cent. and the 30 per cent.; we cannot go on with that; it is simply absurd. I know that his advisers must so advise him. This discrimination would bring the whole tax into contempt.
But that is only half. It is not enough to remove the absurdity. I am asking him to remove an injustice. Even if the case does not stand up on cold business lines—although I think it does—it stands up on the basis of the duty that we owe to these people, to give them assistance, or not to deprive them of the work they already have. It is a duty which every hon. Member likes to be able to discharge.
I ask the Chancellor, therefore, to give us the assurance for which I have asked, and send out a message that these people, who deserve all the help we can give them, will be able to carry on with the work which they love, and by which they live.

10.35 p.m.

Mr. Arbuthnot: Preference has been rightly given in past Finance Bills to materials such as cane used in basket-making by blind and disabled people, and I am sure that my right hon. Friend listened sympathetically to the case argued for a tax reduction upon such articles in this Bill. There is in this Bill a differentiation between cane and materials of an artificial nature such as


plastics. For some reason, rushes are classed among the artificial materials. I suggest that rushes should qualify for the same preference as cane. They are used as much as cane in the making of baskets by blind and disabled people.

Mr. Tom Brown: I join with my hon. Friend the Member for Shore-ditch and Finsbury (Mr. Collins) in his plea for the cancellation of the tax on these articles. The Chancellor cannot justify its imposition on shopping baskets, I wonder whether consideration has been given to the arguments advanced when the Finance Act of 1955 was being discussed, which resulted in the Chancellor withdrawing the proposed tax on shopping baskets on that occasion. Such a tax cannot be regarded as a revenue-producing measure. Is the Treasury so hard up that it has to impose a tax on the products of blind and disabled people, which will bring in only £20,000 or £30,000 in a Budget of between £4,000 million and £5,000 million? Surely we have not reached that stage; surely we are able to lend a helping hand to the disabled and the blind?
The country has spent thousands, if not millions, in years gone by on training these unfortunate people so that they may take their place in society and play a part in industry, and now the Chancellor proposes to tax what they produce and make it harder for them to earn a living. I maintain that this matter has not been considered with the seriousness it merits. Such a step cannot be justified as a tax-raising measure or economically, and certainly it cannot be justified on humane grounds.
People have given their lives to training the blind and the disabled, fitting them into society and giving them a place in life. Are we in the House of Commons, with our sympathy which we should have towards these unfortunate people, to make their task more difficult by the imposition of a tax of this character? I hope not. I hope that the Chancellor will think again and accept the Amendment. I do not intend to advance the argument which was advanced in years gone by. I thought that we had concluded that stage of our arguments against the imposition of a tax on the products of people who were disabled and blind. I beg the Chancellor to look again at this tax.
My hon. Friend the Member for Shoreditch and Finsbury has quoted several letters that he has received. I, too, have had letters from people who are interested, not so much in the profit motive, but in the motive of doing their level best to see that these people are employed in an industry which gives them a place in life and which gives them the feeling of independence. In the mining industry, we have the paraplegic cases. We are now finding that this is the only job that these unfortunate people can do. Does the Chancellor, by this tax, intend to make it more difficult for these men to fit themselves into society and into industry? Is he so hard-hearted? Is he so crazy—because, surely, this is a crazy tax—as to make it more difficult for people to earn their livelihood, all for the paltry sum of £20,000–£30,000 a year out of a Budget of £4,000 million to £5,000 million? I cannot think that serious consideration was given before the Treasury recommended that shopping baskets should carry 15 per cent. Purchase Tax.
I have a letter on behalf of a number of men who exist, not to make profit, but to find work and to do a great human service for individuals whose lives have been overtaken by misfortune. My correspondent writes:
Dear Mr. Brown,
I am writing to you … to ask for your personal support for the protest of bona fide basket makers to the recent Purchase Tax imposed on household shopping baskets. Basket-making is still a craft, rather than an industry on a mass-production scale, and as such it gives employment to many disabled and blind persons who would otherwise find it difficult to serve any useful purpose in the community. Even without the addition of Purchase Tax, the industry has been faced with fierce competition from imported shopping baskets ….
I want to emphasise that. I wonder whether the Treasury, before making this recommendation, gave consideration to the fierce competition from abroad by baskets made by cheap material, by baskets made by slave labour or under bad labour conditions. This industry and these unfortunate people have to face this fierce competition from abroad, and now the Chancellor imposes another tax to make things more difficult.
My correspondent continues:
There is another point which has been raised on previous occasions and which, we believe, was helpful in getting Purchase Tax removed from shopping baskets some time ago.


That is, that there are a number of small family businesses in this area—
that is, in Lancashire, to which my hon. Friend the Member for Shoreditch and Finsbury referred—
making shopping baskets up to the £500 limit, which means that they can legitimately sell without Purchase Tax. This concession lays itself open to abuse. When one member of the family has reached his limit of £500, sales are then conducted through another member of the family, and so on.
Again, unfair competition by the concession given by the Chancellor some years ago. The letter goes on to say:
I feel sure that I can rely on your help in this matter and I thank you for your co-operation.
10.45 p.m.
There is an expression of opinion by a man who is not out to make a profit or to conduct business on a mass production scale but to do the right thing by his fellowmen, to find them work in producing an article that the public wants. The Chancellor and the Treasury would be well advised to have a look at this matter again and to see whether they cannot find a way out without imposing a tax on shopping baskets.
I have had a letter from the United Basket Industry Ltd. I shall not read it all, as I do not want to weary the Committee. It says:
Did you ever hear of so foolish a Tax as the 15 per cent. now imposed on shopping baskets?…The major proportion of the shopping basket industry is concentrated in the Wigan area…. The industry has always found work for a high percentage of otherwise unemployable disabled.
That statement I have checked and found to be truthful, taking the figures from the local juvenile bureau and the employment exchange. It goes on to say:
Before the war we employed over 400 people on shopping baskets alone—today we have about 100 employees and they are not all engaged on shopping baskets.
This I want to impress on the Chancellor:
We used to produce over 900 dozen baskets per week against 80 dozen today, and even this is in excess of demand.
We cannot say that is due to the tax now proposed, but what we can say and prove is that it is because of the fierce competition that is brought to bear by the importation of foreign-produced baskets. The letter goes on to say:
You will appreciate that this fall in demand is not entirely a matter of change of fashion….
Bags that come from abroad have to carry only 10 per cent. import duty

against this 30 per cent. The letter continues:
We don't know why, especially as they have rocked the industry to its roots and numerous of the smaller firms are now out of business.
The writer begs me to do my best to try to persuade the Chancellor to withdraw the suggested Purchase Tax on shopping baskets. He does that first on humane grounds and secondly:
because the amount collected is chicken-feed (say £20,000 out of a Budget of £5,000 millions). If this rural industry is to survive it is in need of protection from foreigners. May we enlist your support in our efforts to remove this ridiculous tax on shopping baskets?
In my experience of this House over sixteen years, and long before I came to the House, I have always found that when the human element came in, when the desire to help unfortunate people was raised, we rose to it. Surely the Chancellor can rise above this niggardly, parsimonious policy he is pursuing by levying a Purchase Tax on shopping baskets, produced by people who are unfortunate not to be able to take their part in normal industrial careers.

Mr. Amory: After which the hon. Member for Ince (Mr. T. Brown) said, I am beginning to feel like a monster. This is a complicated matter, because several Amendments and several different kinds of baskets are involved, but I do not believe that any changes which we are proposing here would work to the detriment of the blind or the disabled. If I were convinced that in fact they would, I should certainly not wish to make those changes.
On bags and baskets generally the tax was at the 60 per cent. rate, and I propose that it should be 30 per cent. The tax on cane and wicker baskets was 30 per cent., and I propose that it should be 15 per cent. That difference was because a substantial proportion of the cane and wicker baskets were made by disabled people. We are still giving cane and wicker baskets a preference of half the rate. Hon Members may say that a preference of 15 per cent. on 30 per cent. is not as good as a preference of 30 per cent. on 60 per cent., but by reducing the general rate we are making those products more competitive.
The hon. Member for Shoreditch and Finsbury (Mr. Collins) raised the question of cane and wicker baskets which may not be wholly made with cane and wicker but may have an element of some


other material, which may be plastic, in them. The reason that I cannot accept his suggestion is that I am advised that it would be extremely difficult to define what "mainly" meant in that connection. I see the point which he made, but if we once embarked on defining "mainly" in that connection we should be all over the shop.
My hon. Friend the Member for Dover (Mr. Arbuthnot) raised the question of baskets made of rushes instead of cane and wicker. To the best of my knowledge only a small minority of those baskets are made by the disabled. The bulk of them are made commercially. If we accepted his suggestion and reduced the rate we should facilitate the entry into this country of very cheaply made baskets, made of that material, which would be very much to the detriment of home-made baskets. Moreover, not all baskets, apart from cane and wicker baskets, are to carry tax at 30 per cent. Clothes baskets, log baskets—the kind of baskets used as household requisites—are subject to the 15 per cent. rate in the Bill.

Mr. Edward Short: The right hon. Gentleman will agree that the baskets made of vegetable fibre of which he was speaking are the cheapest kind of market basket, the type used by the poorest sections of the community, and that if they have a handle they carry tax at 30 per cent.

Mr. Amory: If we attempted to do anything else there we should get into a series of anomalies which would be far worse than anything to which the hon. Member can point in the proposals which we are making.
If you will allow us to discuss this, Sir Charles—I am not sure whether it it was one of the Amendments which you called—we come to the question of shopping baskets, and this is the question with which hon. Members are mainly concerned. They are at present exempt. Very many anomalies arise from this which are causing great difficulty in administration.
Our proposal there was, instead of maintaining the exemption, to impose a tax on cane and wicker shopping baskets of 15 per cent. and a tax on shopping bags of 30 per cent. Many cane and

wicker baskets, admittedly, are made by the blind and disabled, and I could not agree more with what hon. Members have said about the suitability of this kind of work for the disabled. I should be very miserable indeed if I had done anything at all which made it less likely that that work would be available for the disabled. When I was Minister of Pensions, I used to go round and see some of the work done, and I felt then that everything possible should be done to encourage such work. It is hard enough for those responsible for the running of the institutions to find appropriate work for severely disabled people, and the last thing I should want to do—whatever the yield to the Revenue—would be to make it more difficult for the products of this work to be disposed of.
On present advice, I must say that I am not convinced that this would be so. What we should be doing would be this. At present, the exempted shopping baskets compete with shopping bags, both of them being exempt. Under our proposal, there would be a tax of 15 per cent. on the baskets and a tax of 30 per cent. on the bags. I think that shopping baskets made by the disabled would be in a better position than they are now. But I am absolutely at one with hon. Members in wanting to make certain that any change we make here is not to the detriment of the disabled. Therefore, I am willing to consider this matter of the exemption of shopping baskets again to satisfy myself whether or not the views of hon. Gentlemen——

Dame Irene Ward: And Ladies.

Mr. Amory: —and Ladies who feel that what is proposed would be to the detriment of the disabled can be sustained. If I find that that view can be sustained and that I can leave shopping baskets exempt without creating a host of anomalies, which would prove impossible to work, then I will consider it sympathetically.

Mr. Collins: Is it the right hon. Gentleman's intention that, in page 31, line 33, provided that he is satisfied on the matters I put to him, he will take out the word "shopping-baskets"? If that is the intention, then it would restore the position as it was formerly without reviving the difficulty which he mentioned


about bags, and it would do what I believe all hon. Members want to do—certainly what I want to do—that is, restore to the blind workers the chance of making baskets as they have been doing and which, because of the change proposed, they would have far less chance of doing. Although I had to range rather widely in my speech, I am concerned almost entirely with shopping baskets made by blind workers.

Mr. Amory: Yes. I think that the hon. Gentleman understands me aright. I will repeat that I said I would consider further whether it would be possible to continue the exemption which is at present given to shopping baskets—shopping baskets made of cane and wicker, I think——

Mr. Collins: To restore it.

Mr. Amory: Yes, to leave the situation there, as at present. I cannot say now, but I will consider it sympathetically in view of the views which have been expressed.

Several Hon. Members: Several Hon. Membersrose——

The Chairman: Dr. Stross.

Mr. Hector Hughes: May I ask the Chancellor a question?

The Chairman: I called Dr. Stross to ask a question.

Mr. Hughes: I want to ask a question, not to make a speech.

The Chairman: I called Dr. Stross to ask a question, not to make a speech.

Dr. Stross: May I ask the right hon. Gentleman a question? I do not propose to make a speech. Has the Chancellor had representations from the local authorities, many of which have blind workshops? So many of them have workshops for the blind. Having heard the Chancellor say he is very anxious to know what hon. Members think about this, and as he has promised he will look carefully into the matter, may I assure him that we have had urgent representations from the local authority looking after the blind in Stoke-on-Trent, and that it feels very nervous about this matter?

11.0 p.m.

Mr. Amory: I have had so many representations on Budget proposals of one kind and another that I cannot say for certain whether I have had one from local authorities. I am not aware of having

had one, but I will find out whether I have or not. In the meantime, if the hon. Member wishes to send me representations he has had I shall be glad to consider them.

Mr. J. Edwards: In view of the assurance the right hon. Gentleman has given, I would advise my hon. Friend to seek the leave of the Committee to withdraw his Amendment.

Dame Irene Ward: Not yet. On a point of order.

Mr. Collins: I quite agree with my right hon. Friend, and in view of the assurance the Chancellor has given us that he will consider this matter further and refer to it again at a later stage, I shall beg to ask leave to withdraw the Amendment.

Dame Irene Ward: I am not going to make a long speech, and I do not intend to keep the Committee long, but as my family has for several generations been associated on Tyneside with workshops for the blind and have tried to organise work for the blind, I think I am entitled to add a word to persuade the Chancellor of the Exchequer. I noticed that in his speech this afternoon in the general debate on Purchase Tax he said that his new arrangement for Purchase Tax had been designed to help the social as well as the other sides. I think the whole Committee will agree with me that this is a social question.
My right hon. Friend put his case, as he always does, most sympathetically and generously, and he seemed to think, having, of course, a very large number of powerful advisers behind him, that under this new arrangement for baskets the blind would be better off, but I do want to emphasise that there is a psychological approach to this matter. He seemed to keep referring to what hon. Gentlemen thought. Sometimes hon. Ladies have a better psychological approach than hon. Gentleman [Interruption.] I think it is very unkind for hon. Gentlemen to be so anxious to get home. I do not mind if they leave and let me have the Chancellor to myself.
All I want to say to the Chancellor is that there is a psychological problem. When he so rightly acquiesced in the


representations by both sides of the Committee to withdraw the tax on protective clothing for miners, he did it because it was psychologically the right thing. Probably the miners would not have minded paying that additional tax, but it was a psychological matter and the Chancellor responded to the representations, and we were all glad he did.
It is most important that people should be given the opportunity to see that we do look at these questions from the human point of view. I am not concerned in this matter with money, but at the fact that after announcing to the world a few years ago that we had managed to get these articles exempted it is now suddenly announced that we are once again to impose Purchase Tax on baskets which are made by the blind. The whole nation hates it, and I do not mind telling the Chancellor that. Although I think his Treasury advisers may be very clever and able, I do not think they are good psychologists. I think the Chancellor is a much better one, and I hope, if for no other reason, that he will accede to this request and let us have these baskets made by the blind, whatever may be the difficulties, free of tax. It would be far better if all baskets were exempt and the Purchase Tax and the Budget made untidy than to do psychological harm to these disabled and blind persons. I hope the Chancellor will bear this in mind.

Mr. Hector Hughes: Before leave was asked to withdraw this Amendment, I rose to ask the Chancellor of the Exchequer a question, and I submit to you, Sir, that I should be permitted to ask the question. It was significant that the Chancellor was not aware whether or not he had received representations from the various organisations for the blind. In my submission, the Chancellor ought to have known that, and I say to him that the organisations for the blind are the best judges of what the blind do and of what is best for the blind. If he is not aware whether he has received such representations, I ask him now to invite representatives from the various organisations for the blind, so that he may be guided on what is the best interest of the blind in this matter and whether to deal with the tax in accordance with the plea which has been made from this side of the Committee.

Mr. Collins: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Amory: I beg to move, That the Chairman do report Progress and ask leave to sit again.
I hope that my hon. Friend the Member for Tynemouth (Dame Irene Ward) will not think that this Motion has any connection with her offer to remain with me in the Chamber. I think we have had a very useful discussion and made a useful start on these subjects. We have a tremendous amount of work still in front of us, and I hope that with the good will of hon. Members generally we shall be able to make good progress tomorrow.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.

Orders of the Day — RIVERS (PREVENTION OF POLLUTION)

11.9 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): I beg to move,
That an humble Address be presented to Her Majesty under subsection (3) of section eight of the Rivers (Prevention of Pollution) Act, 1951, praying that the period of seven years ending on the thirty-first day of July, nineteen hundred and fifty-eight, during which river boards are, under subsection (2) of the said section, prohibited from taking action without the consent of the Minister of Housing and Local Government in respect of certain contraventions or apprehended contraventions of section two of that Act, be extended for a further period of three years so as to expire on the thirty-first day of July nineteen hundred and sixty-one.
As the House is aware, broadly speaking, it is an offence under Section 2 of the Rivers (Prevention of Pollution) Act, 1951, for any person to cause the pollution of a stream and the enforcement of this provision is left in the main to the various river boards. The Act provides that proceedings for contravention of Section 2 in respect of any trade effluent or any effluent from a local authority's sewage disposal works shall not be taken by the river board during the first seven years after the passing of the 1951 Act without the consent of the Minister of Housing and Local Government. It also provides that the seven-year period, which will expire in the ordinary course of events on 31st July


this year, may be extended by Order in Council. The purpose of the Prayer is to extend this period for another three years.
The provision for fixing the seven-year period originally, and also allowing for the possibility of an extension, was written into the 1951 Act during the Committee proceedings on that Measure. There were two main reasons why that was done. First, there was the hope, which was widespread at the time, that general standards for rivers could be worked out in a few years' time and that the application of those standards through byelaws would be a powerful instrument in improving the state of our rivers.
It was also expected that properly treated effluents from sewage works and trade effluents would be able to comply with those byelaw standards and that the local authorities and the industries concerned discharging these effluents into the rivers would be freed from the risk of prosecution so long as they complied with those standards.
Perhaps a consideration which weighed with the House more than any other in 1951 was the need for control over capital investment. The problem there, as the House will remember, was a very pressing one in the autumn of 1951 and, as matters have developed, the position is still not without its difficulty. Unless there was some control over prosecutions, our hands might have been forced into capital investment which the country could ill afford on sewage and related matters.
In the event, however, the various river boards have been confronted with very many technical obstacles which so far have prevented them from devising byelaws laying down permissible quantity and quality standards for effluents. This is not due to any want of trying, or any want of effort on the part of the river boards. Since 1951, not a single river board throughout the country has been able to submit draft byelaws to the Minister of Housing and Local Government.
Against this background, my right hon. Friend decided some time ago to ask the Central Advisory Water Committee to advise whether the seven-year period should be extended. That Committee appointed a sub-committee under the chairmanship of Sir Frederick Armer,

which included not only members of river boards and local authorities, but also industrialists and people with strong technical qualifications.
After having taken evidence from the various interests concerned, this sub-committee recommended, and this recommendation was unanimous, even though the sub-committee included members of the river boards, that the seven-year period should be extended by a further period of three years. The Central Advisory Water Committee accepted the Armer sub-committee's report and in turn my right hon. Friend decided to accept the Committee's recommendation.
The question which is before the House tonight therefore, is the simple and rather limited one of whether the seven-year period should be extended for another three years. The significance of this is that at present the river boards who wish to prosecute cannot do so without the consent of my right hon. Friend. Since the 1951 Act became law, we have had twenty-five applications for the Minister's consent to prosecute. I would like to give a break-down of this figure. Consent has been given in seven cases and fines have been imposed by the courts. In the remaining eighteen cases, the applications for consent to prosecute were withdrawn while remedial measures were being taken, and five of those are still under consideration. In only one case was consent to prosecute refused by the Minister.
It may be said that the prevention of pollution would be best encouraged by allowing the seven-year period to expire this year instead of extending it, and therefore, I think, that I ought to say what the position would be in those circumstances under the 1951 Act. Under it, the ending of this period brings into play certain legal consequences, the main one of which is that it would be then open to anyone who was alleged by a river board to be causing pollution to plead in defence that it was not reasonably practicable to dispose of the effluent other than by discharging it into the stream; and secondly, that all reasonable and practical steps had been taken to make the effluent not poisonous or noxious. If the court accepted that plea, then the person alleged to be responsible would not be liable to any penalty. This broad provision in the 1951 Act has been in suspense during the last seven


years and will remain in suspense if this period is prolonged as a result of the Prayer which is before the House tonight.
The short point is that it is by no means clear that a termination of the period here and now would necessarily help. It is, of course, quite true that it might be easier for the river boards to put pressure on alleged offenders. But, on the other hand, they would find it more difficult in cases of prosecutions to sustain their argument before the court.
I do not disguise for a moment that the fundamental difficulty is the problem of money. So long as we have restrictions on capital expenditure which may prevent the extension of sewage treatment works and people are liable to be exposed to the allegation of causing pollution which could be prevented, then it is thought by the Armer Committee, and also by my right hon. Friend the Minister, that we cannot ignore the fears of those in industry who are concerned lest they are caught between the difficulties of capital restriction on the one hand and prosecution on the other.
At the same time, I do not want to give the impression that the Minister is in any way complacent about this problem; because where we think that prosecutions by the river boards are justified, we shall not hesitate to authorise them. Where we can, we are authorising capital expenditure for sewage treatment works and sewage disposal, and I might add at this point that, since the war, schemes costing more than £200 millions have been sanctioned and there has been a steady increase in the last few years.
In addition, very substantial sums are being spent by industry on the pre-treatment of trade effluents before they are discharged into sewers or rivers, and a great deal of intensive research is going on in industry on the treatment of industrial wastes. The House will recognise that all these problems have been very greatly aggravated since the end of the war by the post-war industrial expansion and the building of millions of new houses.
I end by saying that my right hon. Friend certainly intends to give the highest priority he reasonably can to expenditure on new works of this kind. I agree that if we were able to forget all about restrictions on capital investment and perhaps authorise the expenditure of

£500 million or even £1,000 million, we could probably work miracles in the cleansing of our rivers, but we cannot do that because of the other demands upon our resources. But we can do our best, financially, technically and in the way of encouraging research, and in that process to hold the balance fairly between the various interests which are concerned.

11.22 p.m.

Mr. Anthony Greenwood: As I represent one of the dirtiest rivers in the country, in common with the hon. Member for Bury and Radcliffe (Mr. Bidgood), I hope the House will forgive me for taking up a little time, even at this late hour, because the statement we have just heard from the Parliamentary Secretary was a depressing and disturbing one. It is one that certainly I view with a good deal of dismay and suspicion. What we are really doing is deferring for another three years the granting of adequate powers to the river boards. I believe that the public want the boards to be effective and to get on with the job of cleaning up the rivers.
Within the limitation that this House imposed upon them, the boards have done wonderful work, but there is certainly no ground for complacency. The Minister of Housing and Local Government told us on 2nd July that 16 river boards had noted some improvement last year and four had reported a worsening in the condition of the rivers in their areas. The fact that four boards had reported a deterioration in conditions over six years after the Rivers (Prevention of Pollution) Act was passed seems to me depressing in the extreme, and in the case of the other areas the improvement is certainly not very noticeable.
Hon. Members will have seen in The Times today a picture of foam caused by detergents from sewage works on the River Trent, about which the Minister of Housing and Local Government assured the hon. Member for Burton (Mr. Jennings) and myself in this House not long ago that he was reasonably happy. I forget his exact words, but from what he said at that time he seemed to be unreasonably complacent about the dangerous condition of the River Trent at many times. Hon. Members who know the condition of the River Tyne and a number of smaller rivers like the Colne, which was discussed a few


weeks ago by my hon. Friend the Member for Uxbridge (Mr. Beswick), will realise that there are certainly no grounds for complacency in these matters.
I was not very impressed by the report of the Armer Committee. I know that the Ministry of Housing and Local Government in its Annual Report told us of the importance of maintaining a balance between absolutely pure rivers and the necessity for disposing of drainage sewage and trade effluents. I confess that it is not always easy to strike that balance. I happen to be vice-president of the Association of Municipal Corporations, which is supporting the Government on this issue, and I am also president of the Pure Rivers Society, which is opposing them, and so I regard myself as especially qualified to appreciate the difficulty of maintaining a balance in this matter. I do not believe that the Report of the Armer Committee maintains a reasonable balance. The proposals which the Government have brought before us tonight constitute an unnecessarily restrictive and grand-motherly piece of legislation. The Report seems to me to be half-hearted, making no attempt to discuss the various arguments to which it refers.
The most impressive argument it quoted against the extension of this period by three years was the argument that the river boards have shown a proper sense of responsibility. In its reference to that argument, the Committee points out that it had been emphasised that no difficulty had arisen when Ministerial consent was not required for proceedings as under the Salmon and Freshwater Fisheries Act, 1923, or under the Act giving power to the Lea and Thames Conservancies. Certainly no one can say that the river boards have used their powers in anything but an extremely responsible way. Indeed, rather than regarding them as rash or irresponsible, the more general criticism is that they might have acted more frequently and strongly.
There is a good deal of feeling, particularly among anglers, that the river boards have too few powers and that perhaps there is too great a representation of local government and industrial interests. The Parliamentary Secretary referred to the fear of those in industry,

but I do not think they need be very frightened that the river boards will be too harsh. I am indebted to the Anglers' Co-operative Association for allowing me to see the evidence it has submitted to the Committee which is reviewing the Salmon and Freshwater Fisheries Act. The Association refer to the three major cases which have been tried during the past few years in which riparian owners have sought to use their common law rights to prevent pollution.
The Association points out that in the case of Myddleton and Others against John Summers and Sons Limited it transpired that the chairman and managing director of the polluters was the chairman of the river board in the district where the pollution occurred. The Association also tells me that in the case of Martell and Others against the Consett Iron Company Limited the president and managing director of the defendant company was the chairman of the river board. In the third case, a rather outstanding case, the Pride of Derby and Derbyshire Angling Association and Another against British Celanese and Others, the Derby Corporation, the second defendant, was represented strongly on the Trent River Board. I do not think that anybody can feel that either the local authorities or industrialists will be unfairly treated by the river boards upon which they have such strong and powerful representation.
My reaction to the report of the Armer Committee appears to be shared by some sections of the Press, the Field, for example, on 24th April of this year described the report as
a disturbing concession on river pollution.
The Engineer on 11th April referred to it being "pusillanimous." I should like to read one passage from the article on the Engineer. It seems to me to go to the very heart of the problem upon which we are asked to pronounce tonight. The Engineer wrote:
It seems plain to us, now that many river boards are over ten years old and no longer inexperienced, that either they should be trusted to act temperately and moderately and thus be assigned the full powers which Parliament wished them to have, or that it should be accepted that the Minister should indefinitely have overriding powers. Of these two courses, it also seems to us that the former is much the more desirable. For, at least in the opinions of those to whom it is a matter of great interest that the rivers of this country should become less rather than more polluted, the effect of the ban upon river


boards taking independent action has been bad. Under the present set-up, which the sub-committee wishes to continue, it is a troublesome and time-consuming matter to prepare a case, not for submission to a court of law, but to the Minister; and there is no certainty, even if the case is a 'cast iron' one in law, that the Minister will not withhold his consent. Thus, a board is unable to exert effective and immediate pressure upon an offender polluting the river and more particularly it is denied any effective ability to deal immediately with occasional and careless offenders. Knowing how troublesome it is to get the Minister's consent, boards are likely to continue to accept any evasive promise of action that may alleviate pollution rather than stand out to get something really firm. The consequence is that those whose interests are likely to be damaged by pollution lack faith in the powers of the boards to protect them.
What are the arguments for extending the period by another three years? First, we are told that one of the arguments is the economic one of the expense involved and we are told about the views of the House when we discussed the Bill seven years ago. Since then, however, industry has been prospering and profits have been high, and if these firms have not been able to put aside some part of their profits during the last few years to make necessary improvements to their works, it is not easy to see when it will be possible to effect these improvements. It looks as if the longer the delay the greater the expense will be.
There is, however, an even more remarkable argument which is used in the Report of the Armer Committee and to which the Parliamentary Secretary did not refer tonight. I refer to the argument in paragraph 13 (d), which states:
Research work, we were informed, was now being carried out, with encouraging prospects, on the purification of certain classes of trade effluents. An extension of the period was required for the results so far achieved to be completed and translated into works practice. It would be better for all that such a course should be followed than that industry should be forced, as a result of undue pressure or court action, into spending money on remedial measures before the best methods of effluent treatment and disposal had been worked out.
It was upon that that the Field, a paper with which I often disagree, but with which on this occasion I am in complete agreement, commented:
This is akin to a doctor telling a patient he must put up with his illness because the best possible cure has yet to be found. Nobody can say that any method of tackling anything is the best possible, since there is always a chance that a better will be found.

The Parliamentary Secretary tonight referred to the fact that no byelaws had been made as one of the reasons why the Government were asking the House to extend the period by a further three years. He referred to a number of obstacles that the river boards had encountered. Unfortunately, he did not tell the House that one of the main obstacles that the river boards had encountered has been the Ministry of Housing and Local Government. In the memorandum which it sent to the Armer Committee, the River Boards Association said:
The main reason why no byelaws have yet been confirmed is that at an early stage the Ministry intimated that confirmation of byelaws must await official guidance on the chemical analysis of sewage effluent. The publication giving this guidance was not issued by the Minister until December, 1956. Moreover, the Ministry have recently intimated that they have increasing doubts as to the effectiveness of comprehensive byelaws prescribing standards in relation to river pollution. In these circumstances the Association fear that substantial progress in the confirmation of byelaws is unlikely in the near future.
In spite of the arguments which were put to it, I am disturbed to find the Minister took the advice of the subcommittee and seems determined to keep the river beds in swaddling clothes. I am still more disturbed—I hope the Parliamentary Secretary will make a note of this—that the Armer Committee has also been asked to investigate the common law position about the pollution of rivers. If the Ministry should ever be tempted once again to deprive riparian owners of their common law rights, it would be a move which would meet with most serious opposition from large sections of the people. The question of pollution gets graver, and I should have thought this was a time to give the river boards more powers rather than to seek to put further restrictions on them.
I appreciate what the Parliamentary Secretary said about increased expenditure on sewerage schemes, but nevertheless there is no rapid improvement. The reason is really quite simple. Towns are more and more taking water out of rivers above the town and putting back water into the river in the form of inadequately treated sewage below the town. The flow of many of our rivers has been seriously reduced by what I think is the misguided policy of the Ministry of Housing and Local Government. Until we get a national water plan this sort of


situation will continue. It is the Ministry of Housing and Local Government which is responsible for curbing development of sewerage schemes and at the same time allowing water authorities to deplete our streams.
The right hon. Gentleman is forced to come to the House to ask for an extra three years to protect local authorities against the consequences of his own dereliction of duty. This will be three years of grace during which our streams will continue to be polluted and during which there will be serious possibility of some epidemic of a grave character.
In spite of what I have said, I would personally advise the House to adopt the attitude of the River Boards Association and allow the Minister to have this Motion tonight but to determine that there shall be no further extension and that the Ministry must really get down to the job of seeing that the river boards can discharge the task which has been entrusted to them.

11.38 p.m.

Sir Lionel Heald: I do not want to detain the House for more than a few minutes at this time of night, but I should like to say a word or two to make it clear that this is in no way a party issue. I have very good reason for having an interest in this matter because it was in fact, I think, the very first matter with which I ventured to concern myself when I became a Member of this House.
I well remember the right hon. Member for Ebbw Vale (Mr. Bevan) making an important contribution to the debate on the Bill when it was brought in. Indeed, I had the distinction in that very early stage of my career of hearing it being remarked that I had found myself in the company of the right hon. Member in the attitude we adopted in this matter when he said, if I remember rightly—at any rate it was to this effect—that this was a matter of trout having as much importance as trade or even trade unions.
I was rather disturbed by the fact that my hon. Friend the Parliamentary Secretary when opening this debate tonight did not even mention anglers and fishermen. There are some of us, on this side of the House and opposite, who are rather disturbed about that. He appeared to have no appreciation of the serious concern which exists amongst those who

engage in that harmless and, as I believe, very good occupation.
When the Bill passed through the House a definite provision was laid down that the river boards and the Attorney-General in the end should be the chief authorities to decide whether prosecution should be undertaken, and it was only as a result of much discussion in Committee that this period was fixed. I think the hon. Member for Rossendale (Mr. Anthony Greenwood) will agree that it was fixed, following discussions, on the basis that if that period were given it would be pretty well as long as would be required to do the job. It was stated—I looked up the Reports of the Committee stage this afternoon—that there was every reason to suppose that if that length of time were given the necessary work would be done.
In view of what has been said on behalf of the Government, I entirely agree that it would be wrong not to give this extension, but I very strongly support what the hon. Member for Rossendale said, to the effect that this should be the last time, because it is necessary that something should be done about the matter. I could not properly delay the House tonight with the story of pollution, but there have been several recent publications which are dreadful in their revelations of what is going on. Of course, one has to be reasonable about these things, but to say, "We must give up these rivers. It is hopeless and it is no good doing anything about it," is a counsel of despair which the House ought not to be prepared to accept, nor do I believe that it is necessary.
Those engaged in piscatorial matters are, I know, apt to stretch things out in all directions, including their speeches, but at this time of night I cannot quote some of the recent articles which have been published and which are very illuminating on this subject. We all want to be practical over these matters, and I want to ask my hon. Friend whether he can give us some assurance that this matter is being taken seriously. Reference has been made to angling, and there is no need to apologise for that, because it is a sport in which millions of people indulge, and they write to us frequently and ask what is being done about river pollution. We should like the Parliamentary Secretary to tell us, if he can, a little more about what is being done.


When the Act was being discussed, it was pointed out that it was unfortunate that the Ministry of Agriculture, Fisheries and Food did not seem to be very much concerned with it, and as far as we can see that Ministry certainly is not concerned with it tonight.
We should like to know whether the problem is being taken seriously. My hon. Friends will agree with me that we do not want to make matters worse for the Parliamentary Secretary's Department, because that Department has great difficulties, but we should like to be able to tell our friends in our constituencies and all over the country who are interested in these matters that there is an appreciation of the problem, that a real effort is being made to deal with it and that some progress is being made.
If that is so, I think we are prepared to allow this further period, but we should like to know that a little more optimism is being adopted towards it and that a little more energy is being applied to it.

11.45 p.m.

Mr. Edward Short: I shall not detain the House long, but this is a topic in which I have a very strong constituency interest. As I understand the position, for the seven years that end on 31st July this year local authorities and industries have been able to pour new sewage into the rivers without any fear of prosecution by the river boards for contravening the 1951 Act. The object of the Motion, as I understand it, is to extend that immunity for a further three years. My constituency and the constituency of my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Popplewell) stretch along the banks of what is probably the worst polluted river in the country, the River Tyne. We raised this matter in the House some months ago, and I described the river at that time as nothing more than an open sewer. The Minister denied that description, but he will be interested to know that, since then, those very words have been used by one of the medical officers of health on Tyneside in his annual report.
The river is nothing more than a rather disgusting open sewer. I do not know what connection it has with health locally, but it is interesting to note that the tuberculosis rate on Tyneside is more

than twice the national average. I do not know what connection there may be, but it surely cannot be very healthy to have this great sewer running through the middle of a densely populated industrial area.

Mr. Bevins: It may be true, as the hon. Gentleman says, that the River Tyne has been so described, but really it is not fair to the House to imply that that is the responsibility of my right hon. Friend. That is the responsibility of the local authorities on Tyneside.

Mr. Short: I am coming to that point in a minute. The Minister was inclined to boast on the last occasion that four salmon had been caught in the Tyne last year. Forty years ago, the number was not four but four thousand.
We now learn that the vast increase in pollution of the Tyne which has taken place during the past year has been going on with the Minister's consent. This really shocks me. As I understand it, the local authorities are under no obligation at all, so long as the immunity exists, to find alternative methods of disposal, and they are under no obligation to render the effluent innocuous. My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) spoke about detergent in the River Trent. We should be very glad to have a little detergent in the Tyne; it might clean the place up a little. The sort of pollution we have is a great deal more serious than that caused by detergent.
Tyneside Members of Parliament have complained in the House for years and years about the pollution of the Tyne. The hon. Lady the Member for Tyne-mouth (Dame Irene Ward) said that two of her great hopes were to see the Tyne tunnel built and the River Tyne cleaned up before she died.
Money, of course, has always been the trouble. In 1951, when the Act was put on the Statute Book, it was estimated that the cost of taking the sewage to the sea would be £10 millions. I am told by the city engineer of Newcastle-upon-Tyne that the cost now, seven years later, would be £20 million. I am sure that Tyneside as a whole will be shocked to find from this debate that all that has been done in the way of new sewers pouring into the River Tyne during those seven years, in which time the cost has been doubled, has been done with the approval of the Minister.
I agree with the right hon. and learned Gentleman the Member for Chertsey (Sir L. Heald) that it is quite shocking that any river in this country should be polluted in this way. No part of the country is very far from the sea. It is simply a question of money to take the industrial waste or sewage to the sea. It is simply a matter of money—nothing else. There is no engineering difficulty at all, and no great distance is involved. We are surrounded by hundreds of miles of sea; the waste and effluent could be taken right away and disposed of. We cannot go on as we have been doing.
Every year, great new housing estates arise, and every year new industries develop, with new and more deadly kinds of waste. Who knows? In the future we may have nuclear waste discharged into our rivers. At any rate, we cannot go on in this way. I support what my hon. Friend and the right hon. and learned Gentleman have said. If we agree to the extra three years tonight, I hope that the Minister will use that extension of immunity for local authorities and industry to make a real effort to clean up what should be healthy arteries in our countryside, not open sewers.

11.50 p.m.

Major Sir Roger Conant: I make no apology for intervening at any hour of the night in debate on this very important matter, but happily most of what I intended to say has already been said, and so I shall not take up very much time. In spite of the persuasive argument of my hon. Friend on this Motion, I am still wholly against it. I think it is based on an entire misconception of the whole problem, that the bodies charged by Parliament with the task of keeping our rivers clean should be restricted in this way from taking any action against polluters for another three years without going through all the long drawn our process of getting the permission of my right hon. Friend. I am informed that it involves a good deal of duplication and unnecessary delay.
My hon. Friend referred to the reasons for which this restriction on the right to prosecute was originally imposed. As far as I can recall, the real reason was not so much the provisions of standards for dirtiness of water to be made out by the river boards, but to give them a reasonable period of time to find their feet and

show themselves responsible. That is what most people anticipated was the reason for the seven years' delay. River boards are now, I think, responsible bodies, and the Armer Committee went out of its way to mention the fact that they had acted so far with considerable forbearance. Were it shown that river boards had in some way acted irresponsibly, or if some action of their own had brought the industrial life of the country to a standstill without the overriding authority of my right hon. Friend, that would be the only case for extending this restriction.
As the hon. Member for Rossendale (Mr. Anthony Greenwood) pointed out, the argument which affected the Armer Committee was the further cost involved to industry. As was pointed out in the Field last month, there has never been a time when industry could better have afforded to undertake this cost. There is the even less sound argument that some time is needed for experiment.
I really cannot see any justification for the continuance of this restriction. I only hope my hon. Friend can say categorically that at the end of three years this restriction will be withdrawn. That will be for the benefit not only of river boards but, I am sure, of industry as a whole.

11.53 p.m.

Mrs. Harriet Slater: On 1st June the Minister of Housing and Local Government is to launch the Clean Air Act with a vengeance and with jubilation. I should like to think we were able to launch in the same way and with the same excitement a sound scheme for cleaning our rivers. Like the hon. and gallant Member for Rutland and Stamford (Sir R. Conant), I make no apology for speaking in this debate, because this is a matter of great importance not only to the anglers—and I have very great respect for them—but also for the good health of our people and the beauty of our countryside and our towns.
How sad it is for those of us who have hiked in our mountains and dales and valleys and have known the joy, after a great day of walking and tramping, to stop by a river and wash and listen to the river run by, and to be refreshed by it, to realise that when that little stream has gone only a little further on its way it will become, as my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr.


Short) said, a dirty, dangerous river. That happens because local authorities and industry allow masses of what in some places is crude sewage and in others industrial waste to be poured into our rivers.
I recall that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) told me that twenty years ago he was told by the then Minister of Housing that he would make him a promise that within a very short time the River Trent would be free from pollution. But now, twenty years later, we have very much more pollution in the Trent.
We have already spoken about fishing and angling in the rivers. I live quite near the Dovedale, and I shudder to think what Isaac Walton would say if he could see some of our rivers and the conditions in which anglers have to pursue their hobby today. Personally, I am not interested in fishing, but to many working men it means complete relaxation from the stress and noise of the towns and factories in which they have to spend long hours during the week. They enjoy a sense of achievement when they have had a good day's fishing. Salmon fishing is protected to a large extent, and we would ask that the Minister of Housing and Local Government—who cannot pass on his responsibility to the local authorities—should give some protection to the ordinary fishers, who go not far from our towns and who are unable to go to the highlands and mountains, where salmon fishing is protected.
On the health aspect, one has only to consider the statement by my hon. Friend, or go through Salford and see the dirty, inky Irwell. Before I came to this House, I often had to stay in Manchester, and I always feared that something might happen to the hotel and I might have to jump out of the back windows. I dreaded the consequences of landing in the dirty River Irwell. Some years ago the Irwell flooded many of the houses along its banks, and today those houses still bear the tide marks and smell of the floods.
Large quantities of industrial effluent are also turned into the rivers. Many factories take from the sewage disposal works treated industrial effluent; they use that treated effluent, and then it is again poured into the rivers, to cause

much more pollution than we had before. Sewerage engineers in every local authority are deeply concerned about the large amount of industrial effluent with which they are unable to deal and which is consequently poured into the rivers. In Stoke-on-Trent we have a particular problem of gas liquor. We have a large gas works and our local sewerage works engineer has been asked repeatedly to increase the amount of gas liquor which he can take to be treated through the works. A dangerous point is now coming, at which, if more gas liquor is taken into the sewerage works to be treated it is possible that the works may be put out of action. We have to ask ourselves this: if the local authority takes so much of this gas liquor, where does the rest go? Obviously it has to go into the River Trent. Will further research be undertaken to inquire into the breakdown of the chemical compounds in gas liquor, or to see whether it could be sprayed on to some burned-out spoil heaps to help to break them down?
The other problem about which I wish to speak is that of detergents. I am sure that my hon. Friend the Member for Newcastle-upon-Tyne, Central would not like large quantities of detergent to be poured into the River Tyne, because not only would he have a problem with sewers, but he would have the problem of foam blowing into homes and creating a great problem in the sewage works in Newcastle-upon-Tyne.
Those of us who know anything about sewage works know that our engineers have tried all kinds of things to break down the foaming agent in detergents. In some cases, if it blows over the paths by sewage tanks, it is a positive danger to the men who have to work there. It is also a nuisance in blowing about villages and towns and it chokes fish in the rivers.
Could not more energy be spent in research into questions of the foaming agent in detergents, and could not pressure be brought to bear on that industry to investigate whether more oxidisation and less foaming agent would not produce the same cleansing effect now possessed by detergents? After all, the firms which produce detergents try to persuade housewives to buy detergents by using very expensive methods of coupons and samples and that kind of thing.
They could spend a little of that money on trying to do away with, or to break down or to use different sulphonates in their commodities, and in that way I am sure that we could go a long way towards solving the problem of the foaming of detergents. This is a relic of the days when the woman at the wash-tub thought that she was doing very well if she had a great heap of soap suds around the tub. Those who attempt to persuade housewives to buy detergents suggest that it is the foam instead of the other ingredients and the oxidisation which do the cleansing.
I disagree with the view of my hon. Friend the Member for Newcastle-upon-Tyne, Central that sewage should be taken out to sea. I hope that we will not use our rivers for that purpose. I hope that the Minister of Housing and Local Government will use a little more energy to try to get authorities to undertake composting of household refuse and sewage in order that it may be used for fertiliser, thus reducing the necessity of pouring crude sewage into our rivers or into the sea.

12.4 a.m.

Mr. J. C. Jennings: At this witching hour of midnight I intend to be very brief. River pollution is a national problem and I fully recognise and appreciate the great problems facing the river boards. That is why I deplore the extension of the immunity. Like the hon. Member for Rossendale (Mr. Anthony Greenwood) and my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), I am prepared to acquiesce in the Motion tonight on condition that the Ministries concerned will take this matter very seriously and give us some practical results within the next three years.
At Burton we have had tremendous experience of the problem of river pollution. There are two problems with which we have to deal. There is the problem of detergent foam and that of filthy effluent. Some people try to tell me that detergent foam is not river pollution, but anything that destroys the amenities of a beautiful river is pollution and should be remedied. In Burton-on-Trent we are accustomed to dealing with a froth which is most salubrious; but, unfortunately, we have now come into contact with another kind of froth which

is not so salubrious. Detergent foam is a long-term scientific problem and the solution to it is primarily with the manufacturers; but it is also very much the concern of the Minister and then of the river boards.
On the Trent itself, which is strategically sited for the erection of power stations, one finds this problem in its most aggravated form. There are three of them within twenty miles of my home—Drakelow, Willingdon, and Tupton—which take cold water from the river and then send it back as warm water to act as an activator for the foaming agent in the detergent. Saturday's regatta at Burton examplifies this very serious problem, which can be seen from the photograph which I have here and which I pass to the Parliamentary Secretary as exhibit "A".
Secondly, we are concerned with filthy effluent. Time and time again I have raised this subject together with some of my hon. Friends, but all we have been told is that, so far as the Black Country and the Trent area are concerned, there is a long-term programme of work to deal with sewage. I want to ask tonight what progress has been made with regard to the treatment of sewage. The Trent is a classic example of a national problem. In the olden days it was called the "Silvery Trent" but now it is nothing but a dead and stinking river with no living organism in its water for miles above Burton. The last annual report from the Trent River Board states:
Above Nottingham for about 20 miles the Trent is habitable by coarse fish, but no fish can subsist in the next 20 miles due to the accession of the heavily polluted River Tame (45 miles long)".
That is because it is bringing down effluent from the Birmingham area. Then the report states:
Above the River Tame, the Trent again holds a good stock of coarse fish for about 10 miles but is once more depopulated over the next 30 miles by pollution from the Potteries".
This river is virtually an open sewer and I have seen flowing and floating islands of putrefaction going down the Trent. On Saturday, during the regatta to which I have already referred, one of the oarsmen in the singles sculls went through one of these floating islands and, by the time he got through its diameter of six feet, he was five lengths behind. Now we have to think in terms of moving the regatta—an event of great interest and


enjoyment to the people, which has been held for 103 years.
The Minister must consult with his right hon. Friends the Minister of Agriculture, Fisheries and Food, and the Minister of Power to try to get something done to get rid of this infernal nuisance. What progress is being made in the reaches above Burton? I am told it was practicable to dredge the river before the war but that it is now completely impracticable to do so. Why is this? We in the area want to see some positive action and I am perfectly prepared to make a nuisance of myself on behalf of these people while I am in this House.

12.10 a.m.

Sir Peter Agnew: My hon. Friend the Parliamentary Secretary has had a comparatively smooth passage in propelling the ship of State through the polluted waterways and rivers of our country tonight, but if he finds himself in the same position three years' hence he will not find it such a good passage; it might be much more stormy.
I do not think that my hon. Friend and his right hon. Friend fully appreciate the depth of feeling which exists in this matter—and not only amongst hon. Members whose constituencies are directly affected. There are two rivers in my constituency—the Severn and the Avon—but it is not only on behalf of my constituents that I join in supporting those who deplore the extension for which my hon. Friend is asking; it is very largely on behalf of those people who come down to the rivers, chiefly at the weekends and at holiday times, either for the purpose of fishing or pleasure boating. In the summer weather they very often also like to bathe in the rivers, and if these rivers continue to be dangerously polluted the risk of disease will be increased for them.
The hour is late, and so I shall only say that just as we now have legislation which sets apart great areas of land as National Parks, and regulates strictly what goes on inside their boundaries, so we should have similar legislation for our rivers. It is nothing less than a scandal that we should continue to neglect the condition of our waterways—much smaller in area than the national parks, but equally important—which flow

through our countryside. They are the natural recreation grounds of the people, and they also discharge their vital task of draining the land for proper agricultural use.
Only on the understanding that my right hon. Friend will bend his energies to giving real power to river boards and local authorities to take this matter in hand, do I assent most reluctantly to the extension of the period.

12.13 a.m.

Mr. Bevins: If I may speak again, with your consent and that of the House, Mr. Deputy-Speaker, I should like to say a few words in reply to some of the points that have been raised. First, my right hon. Friend certainly appreciates the feelings which are entertained on both sides of the House about the condition of some of our rivers, but I do not think that we help ourselves—and we certainly do not help to solve the problem—by exaggerating some of the less happy features.
The hon. Member for Rossendale (Mr. Anthony Greenwood) said, quite rightly, that in certain areas there had been some deterioration in the state of our rivers. But the question that the House is considering tonight is whether the removal of Ministerial consent would help to lessen the existing measure of pollution, and whether this would be the right time to remove that consent. I respect the hon. Member's point of view, and certainly understand it, but it was certainly not taken up by the Armer Committee, which put forward a unanimous recommendation and which, as I have said, had on it several prominent members of river boards throughout the country.
On the hon. Member's point that we were not justified in extending the period, I would submit to the House that it would be rather unreasonable, at this stage, to expose people to the risk of prosecution when control over capital investment may be holding back the construction of modern sewage works through which most industrial effluents should pass. Were there no brake on capital investment, the case of the hon. Gentleman would have been a strong one, but regard must be paid to the fact that there is such a brake at present.
The hon. Gentleman referred to a feeling that there had been a dereliction of duty by the Government. The figures


for capital investment in sewerage works since the war do not lend support to the view that this Government have been neglecting their duty. In 1948 the figure was £9 million, and since then it has risen to an average of £25 million over the last three years. The hon. Gentleman also referred to the danger of an epidemic, but I would remind him that there is no evidence of a single scheme put up by a local authority which has been turned down, if it was essential in the interests of health. If any hon. Member has evidence of any such scheme, we shall be prepared to give it immediate and sympathetic consideration.
My hon. Friend the Member for Burton (Mr. Jennings) asked about the long-term efforts to lessen pollution in certain reaches of the River Trent above Burton. A good deal has been done since the end of the war. There have been six or seven substantial schemes where work is in progress or has been completed. My hon. Friend will recognise that the Birmingham Tame and Rea District Drainage Board has proposals for considerable reconstruction work which it is estimated will cost about £9 million to £12 million. It will be necessary to hold a public inquiry, but I have every reason to think that the scheme will be approved in the comparatively near future. That will be a big job which no doubt will take years to complete, but it will make a substantial improvement to the River Trent.
The hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) spoke of the treatment of gas liquor and I can assure her that investigations are being carried out by the Gas Council. I will not add to that or I shall be anticipating the reply to a Question which the hon. Lady has on the Order Paper for tomorrow. Several hon. Members asked about the progress of efforts to deal with detergents. Certain constituents in synthetic detergents make less efficient the processes in certain treatment. Some constituents are only partly broken down, with the result that they produce foam and scum at the disposal works and in the rivers. These problems have been studied by a standing technical committee on detergents which was set up last year, and they are also being examined by the larger manufacturers who have been most co-operative with the committee. We are hopeful that in the not too distant future a detergent will be produced in

this country from which these constituents which cannot be broken down will be eliminated. A real advance has been made in this direction and we should not have to wait an inordinately long time before we are able to offer some remedy for what undoubtedly is a serious nuisance.
My right hon. and learned Friend the Member for Chertsey (Sir L. Heald) referred in rather pained tones to the position of the anglers and he was right to do so. The only reason why I did not refer to it earlier was because I doubted whether it was within the bounds of order within the context of the Motion. I assure my right hon. and learned Friend, however, that we are very conscious of the desires of and the difficulties which face the angling community as a whole in many parts of the country. An admirable piece of evidence was put to the Armer Committee by the National Federation of Anglers, which, in spite of all these difficulties, now speaks for a considerably larger number of anglers than it has ever spoken for before. The House will, I am sure, realise that the position of the anglers is of necessity bound up with the general problem of pollution.
I should like to disabuse the idea that may have crept into my right hon. and learned Friend's mind that there is any complacency in the Ministry of Housing and Local Government. There is not. We are certainly determined to do all that we can within the financial limits which are set. It has been recognised by both parties in this House that this is a problem which is bound in the nature of the case to take time. We are faced with a legacy which derives from the last 150 years and it will not be solved in a day.
Indeed, I have a quotation from the right hon. Member for Ebbw Vale (Mr. Bevan) when he introduced the Bill in 1950, when he said:
I should like to remind hon. Members that this matter of protecting our rivers and streams is a continuing process. It is not one that can be accomplished overnight. It is one which will have to be done gradually over the years."—[OFFICIAL REPORT, 27th November, 1950; Vol. 481, c. 807.]
That, perhaps, was a bit complacent. I do not feel as complacent as that, nor does my right hon. Friend. We shall certainly do our best as far as possible, by expanding these new sewage treatment


works, by co-operation with the river boards, by encouraging further research on the industrial side and in any other way possible.
In reply to the point raised by my hon. and gallant Friend the Member for Rutland and Stamford (Sir R. Conant), which was raised also by several other hon. Members, I cannot see the future with precision but I should certainly hope that this would be the only extension of its kind.

Question put and agreed to.

Resolved,
That an humble Address be presented to Her Majesty under subsection (3) of section eight of the Rivers (Prevention of Pollution) Act, 1951, praying that the period of seven years ending on the thirty-first day of July, nineteen hundred and fifty eight, during which river boards are, under subsection (2) of the said section, prohibited from taking action without the consent of the Minister of Housing and Local Government in respect of certain contraventions or apprehended contraventions of section two of that Act, be extended for a further period of three years so as to expire on the thirty-first day of July, nineteen hundred and sixty one.

Address to be presented by Privy Councillors or Members of Her Majesty's Household.

Orders of the Day — WAR PENSION (PERSONAL CASE)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]

12.23 a.m.

Mr. Anthony Fell: I am grateful for this opportunity to take up with my hon. Friend the Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance the case of Mr. F. W. Hunter. I hope not to keep the House long, particularly at this late hour. On the other hand, I am quite used to speaking at a late hour of the night or an early hour of the morning; and on this occasion I feel so strongly and I think that my constituent, Mr. Hunter, has so strong a case that I do not at all mind having to wait until this hour to talk about it.
I hope that my hon. Friend will realise that in asking for this Adjournment debate I did not do so merely to talk about the case of Mr. Hunter, but in the hope, and, indeed, because of the history of the Ministry of Pensions, in the belief, and almost in the conviction, that my right

hon. Friend the Minister would do something about it when I raised the case with him again. I am even hoping that, without having informed me of the fact, my right hon. Friend has reconsidered the case and will do something further about it.
I am in some difficulty because there was an Adjournment debate some time ago on the general question of disseminated sclerosis and there was a bit of difficulty over what was and what was not in order on that occasion. I shall certainly not say anything about the independent Pensions Appeal Tribunal, but I think I must be allowed to mention the history of this case very briefly, as indeed it has been mentioned by the Minister to me in correspondence. Mr. Hunter served in the Forces for about twelve years in all, with a break at one stage, and at the end of that time he was discharged suffering from psycho neurosis. This was later considered and he made a claim on 5th January, 1948, for disseminated sclerosis.
As was reported in HANSARD, Mr. Hunter's claim was accepted by one panel of the Ministry and, years later, in 1953, the case came up again and another panel of doctors turned it down. Later it was referred to the Pensions Appeal Tribunal, which upheld the action of the second lot of the Ministry doctors. Therefore, when a final decision was made, Mr. Hunter was put in a different position from that which he had thought himself to be in from 1948 to 1955. The Joint Parliamentary Secretary to the Ministry of Pensions, on 31st March at Question time, said:
As I told the hon. Member in my letter of the 19th March, the decision of 1948 was wrong."—[OFFICIAL REPORT, 31st March, 1958; Vol. 585, col. 840.]
That raises a very big question. When does the Ministry take responsibility for a wrong decision and when does it not? I should have thought that the Ministry of Pensions and National Insurance had always had the reputation, as I said that day, of giving the benefit of the doubt to the claimant whenever possible. Indeed, the former Parliamentary Secretary, my hon. Friend the Member for Norwood (Sir J. Smyth) said on 26th April, 1955:
There has been a series of very important judgments by the Court of Session and the High Court in recent years on this disease. I would assure the hon. Gentleman that the whole outlook of my Ministry on these matters


is, 'Can we give the man a pension for this?'"—[OFFICIAL REPORT, 26th April, 1955; Vol. 540, c. 902.]
Mr. Hunter is receiving a pension, but the difference in his pension as a result of the ruling of the tribunal is £4 7s. 6d. per week. At present he gets a 50 per cent. pension of £2 2s. 6d., plus unemployability supplement of £2 15s. and comforts allowance of 10s., a total of £5 7s. 6d. If he were getting a 100 per cent. pension he would get £4 5s., as he is completely and utterly incapacitated as agreed by the Ministry, he would have unemployability supplement of £2 15s. and constant attendance allowance of £1 15s., plus comforts allowance of £1—a total of £9 15s.
I think it is hard that this man should lose that amount of money because of a mistake at the Ministry. It may be said that but for that mistake at the Ministry he would have received less over these years and that this is favourable treatment, but I do not regard that as a very good argument. The fact is that the Ministry told the pensioner one thing and made a decision and then, several years later, said, "We were wrong. We made a mistake".
I have no doubt that my hon. Friend has a brief, because it is difficult to talk about such matters without a brief, but I do not in the least want to hear him read a brief, unless he can tell me that very favourable consideration will be given to this case and that he will try to help Mr. Hunter.
May I make a suggestion as to how he might do this? I understand that this sort of case is reviewed every two years. Although it is impossible to change the ruling of the Pensions Appeal Tribunal, it seems to me that it is not impossible for the Minister to help my constituent. I understand that he can make a larger award—possibly 60, 70, 80 or 90 per cent. I suggest that he should make it 99 per cent., or, if he cannot do that, at any rate that he should make it much larger than it is now. He should at least cut down the very considerable difference between the £5 7s. 6d. which my constituent now gets for complete disablement and the £9 15s. he would be getting by the original decision of the Ministry's own doctor had that been correct.

12.33 a.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. W. M. F. Vane): When I heard my hon. Friend the Member for Yarmouth (Mr. Fell) ask his Parliamentary Question a short time ago, the last thought in my mind was that I should be called upon to answer the Adjournment debate if he pursued the course which he then said was in his mind. As it turned out, it was one of the first problems which I was given to consider, because the original date on which the Adjournment was likely to take place was only a few days after I took up this appointment.
I can therefore assure my hon. Friend that I have thought a great deal about it and gone into it as fully as I can. I do not intend to repeat a brief. All the same, certain harsh things were said, although they were not charges, against my right hon. Friend, and I think my hon. Friend will consider it just that I should reply. I was glad to hear what he said about the Ministry's reputation. I do not for a moment want to avoid proper responsibility, but we must distinguish between the responsibility of the independent Pensions Appeal Tribunal set up by the Lord Chancellor and that of my right hon. Friend. In order to make the position clear, I must first speak about this disease of the central nervous system, but I shall speak briefly and I do not intend to go over what has been said about it on previous occasions. Then I shall say something about this individual case.
Every case of disseminated sclerosis has its tragic features and I will in no way attempt to belittle that. One of the tragedies of this age is that this disease has to be counted among those which smite apparently healthy men without warning, by and large resist treatment and still have to be ranked among those diseases of unknown origin—unknown, but yet not shown by statistics to claim any majority of its victims from those who suffer from either war wounds or civil injury.
We do not, perhaps, know a great deal about its origin, but the consensus of medical opinion is that certain things cannot be regarded as giving rise to it. The modern view is to accept the disease as having basically a constitutional


origin. Medical opinion says that, where a man develops disseminated sclerosis, it is not likely to be caused by the rigours of Service life. However, since it is the policy of the Ministry to treat the rules as being there if not to be broken at least to be stretched, if they can be, in the interests of the claimant, aggravation has been accepted where it is thought that military service could be connected with the progress of the disease, even if only very remotely. Mr. Hunter's case is one of those which has been so treated.
The burden of my hon. Friend's case is that the Minister's action in changing this entitlement from attributable to war service to aggravated by war service ought to be called in question. My predecessor, in answering the Parliamentary Question to which reference has been made, said, on 31st March, that the original entitlement had been a mistake and one not in accord with accepted medical opinion; it was, indeed, very far from what medical opinion now says. Mistakes are rare, but in a large Ministry like the Ministry of Pensions, with every case being considered as an individual, mistakes do happen occasionally. It is quite impossible that they should not. I hope that my hon. Friend will notice that in this case the mistake was made in favour of the pensioner. It was not a mistake on the other side. It would not be fair to others to leave it undisturbed. I shall not say more than that because my right hon. Friend's action has been confirmed by the independent Pensions Appeal Tribunal.
From this Tribunal, there is an appeal which lies to the High Court on a point of law. My hon. Friend has probably considered this, in consultation with his advisers. Such an appeal would be out of the normal time, but probably not impossible. Mr. Hunter has also made a separate appeal. He appealed against the 50 per cent. assessment, and this, too, was confirmed by a Pensions Appeal Tribunal. This decision was for a definite period, not of indefinite duration, and when it was time to review it, in October, 1957, my right hon. Friend reviewed it at the same rate, 50 per cent., as the Pensions Appeal Tribunal had thought appropriate a short time before.
It would seem that that was the right thing to do, in the absence of medical

evidence suggesting any substantially higher assessment. This again, I understand, could be subject to an appeal, although I believe that it is now out of time. I think I cannot add usefully to that at this moment. Of course, my hon. Friend must remember that this review is only of two years' duration, and it will come up again in course of time for further review.
The Ministry is not heartless in these cases. The Royal Warrant provides various allowances as well as basic pension. These allowances are designed to meet the special needs of the very badly disabled. Again, they are elastic and can sometimes be stretched. This case is an example. The unemployability supplement, which is generally awarded only to men whose accepted pensionable disability is the main cause of their inability to work, has been awarded to Mr. Hunter, who is on a 50 per cent. rate, which is lower than average.
The figures my hon. Friend mentioned for Mr. Hunter's pension are correct. I do not know that I can add very much more on this occasion. I have explained how my right hon. Friend is bound by the decisions of the Pensions Appeal Tribunal. I have tried to indicate to him courses it is worth his considering with a view to a review of those decisions. I have told him that the period of the present assessment is one of only two years and will again come up for review in the not too far distant future. I hope he will agree, and that all hon. Gentlemen will agree, that sad though this case is, sad though this disease is, whether it strikes a man who has served in war or not, my right hon. Friend in cases such as this wants to be nothing less than just and fair and as generous as the Royal Warrant allows.

Mr. Fell: I am most grateful to my hon. Friend for the remarks he has made and for attempting to be as helpful as he can. I wonder if he can tell me whether or not it would be possible for his Ministry, as it has such good will towards all pensioners, itself to reconsider the matter of the 50 per cent., which was arranged after the last review last December, and which has not yet gone to an appeal tribunal. Would not my hon. Friend agree that there is really a case for asking who is to pay when the Ministry makes a mistake? My hon. Friend has been frank in admitting that


the Ministry made a mistake. Who is to pay? Will it be the person about whom the mistake has been made, or the Ministry?

Mr. Vane: I appreciate what my hon. Friend has said about my reply. It is not just this case, and it is not as simple as he suggests. All the evidence is considered very fully and sympathetically, and he must realise that by the Royal Warrant pensions are payable for disabilities which have causal connection with military service. It cannot be otherwise. Medical opinion is definite about this disease. I have admitted, and my predecessor admitted, that there was a mistake made in this case. These assessments of 50 per cent. come up periodically for revision. Naturally, the figure which is now current would not have been arrived at without

the most careful consideration in the light of all the circumstances. As my hon. Friend knows, the pensioner is in a position to appeal against all these decisions to an independent tribunal whose findings are just as binding on the Minister as they are on the appellant, and from the findings of this tribunal there is also an appeal on a point of law, with leave, to the High Court. I referred to that, and suggested it might be worth his while to go into any opportunities which might arise therefrom. I do not think I can add anything more tonight, much as I regret that I cannot go all the way to meet my hon. Friend on the lines suggested.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to One o'clock.